by Guest » Fri May 11, 2012 12:46 pm
I am a state employee living in Ohio, and am under the basic employee insurance plan. I plan to get married within a month. What I want to know is, will I be able to include my spouse under my policy as well? How much coverage will be provided for her?
Posted: Fri May 11, 2012 05:10 pm Post Subject:
Beats me. That being said, get it outside of work. There are many advantages to this with virtually no disadvantages if she is healthy.
Posted: Sat May 12, 2012 12:46 am Post Subject:
Your department's HR person will know the answer to your question. Or the state personnel agency. I wouldn't be surprised to find out that there is a website which tells you all you need to know.
Posted: Fri May 18, 2012 09:42 am Post Subject:
An individual policy may work out better for the both of you especially since life insurance through an employer doesn't follow you if you quit or get fired. Many people choose to have individual [Link removed - Admin] term life insurance[/url] policies on themselves (with child or spouse riders) and have supplemental insurance through group coverage on the side. And if you're in great health, chances are you're probably overpaying for group coverage. Compare rates on an online aggregator website to find out for yourself.
Pat Cassidy
Posted: Fri May 18, 2012 10:33 am Post Subject:
It depends. If you want to enroll your wife within your insurance policy and you also want that she may also get the same benefit of the covers like that of you, then it will be the decision of the insurance company, and if it agrees then the premium rates of your insurance will get affected. They can go high from the next month.
Posted: Tue May 22, 2012 02:33 pm Post Subject:
then it will be the decision of the insurance company
This is NOT a decision of the insurance company. It is either permitted under state law or not, but it is only a decision of the employer when a group life insurance policy is involved.
fkvmaru's reply is proper, but incomplete, because he fails to explain why. So let me build on that.
Group life insurance -- indeed, all group benefits -- are only "good" as long as one's employment lasts (and perhaps not even that long). When one is no longer a member of the "group", entitlement to the coverage/benefit generally ends. A person could still be employed by the same employer yet lose their group life insurance because they were promoted or transferred into a different group . . . such as from an hourly factory worker covered under a union's group life insurance, to a foreman now considered a member of management.
Group life insurance amounts are usually insufficient to meet a person's actual need for life insurance coverage. It may be supplemented with additional group coverage or individual insurance.
As fkvmaru suggests, having individual coverage offers certain advantages. First, it would not end abruptly simply because of a change in, or loss of, employment. It would probably be less costly than a conversion life insurance policy offered by the former group life insurance company. Second, the insurance amount can be closely tailored to a person's actual need for life insurance -- to pay debts, medical expenses, provide educational funding, and living expenses for those left behind -- which, combined, are nearly universally higher than the amount of group insurance being provided by the employer, and vary from one employee to the next.
Posted: Tue May 22, 2012 09:45 pm Post Subject:
Max, individual coverage is also usually less expensive.
Posted: Wed May 23, 2012 12:16 am Post Subject:
Less expensive than group insurance? No it's not.
Posted: Wed May 23, 2012 05:35 pm Post Subject:
Less expensive than group insurance? No it's not.
Max, it is this type of quote that makes me wonder if you actually sell much in the way of insurance.
Let's use FEGLI as an example since it is the largest group insurance program covering 4 million people.
Jim is a healthy 43 year old and makes $50,000 and wants to buy an additional $250,000 of coverage.
There are at least 10 carriers that will give him a guaranteed rate of less than $28/month for 20 years. If he was a female, there would be at least 20 carriers and some rates would be under $21/month.
If Jim or his female version buys group insurance from FEGLI, his cost would be $27/month for 2 years, followed by $43/month for 5 years, followed by $70/month for 5 years, followed by $124/month for 5 years, followed by $281/month for 3 years.
This is not some cherry picked example. You'll find the same with almost any example comparing group coverage to individual coverage for a healthy person. In total, the FEGLI premiums for 20 years will be close to $25,000 on a non-guaranteed basis and the individual coverage will be around $6,700 on a guaranteed basis.[/quote]
Posted: Wed May 23, 2012 06:30 pm Post Subject:
This is not some cherry picked example
Yes it is -- and if you made a comparison on an apples-to-apples basis of 5-year banded renewable term from the few companies that offer it, your illustration would not hold water. The same is true for VGLI and its 5-year banded rates -- there are plenty of companies whose long-term premium rates are lower as well. But those are two particular anomalies.
It doesn't hold true for SGLI which has a rate of $0.065 per $1,000 ($26 per month for the maximum $400,000 benefit + $1.00 per month for the maximum "Traumatic Injury" benefit) -- regardless of the servicemember's age.
Now, let's leave the government out of the discussion and talk about the real world where the other 85,000,000 - 100,000,000 group-insured workers are, collectively, covered. When a corporation purchases a group annual renewable term policy for, let's say 250 workers, and is experience rated at, let's say $0.09 per $1,000 for an average age of 28, that's $4.50 per month for the $50,000 maximum benefit under federal law without having to impute income to the employee for the excess premium for a death benefit exceeding $50,000. That rate is unlikely to change (or change much) from year to year if the average age of the group remains reasonably constant -- new folks coming in, old folks leaving, and the experience rating does not suddenly increase (the folks, young or old, are leaving in caskets).
The 28 year old won't get $50,000 of individual term life insurance for $4.50 per month (some companies won't write individual policies with premiums less than $10 per month), and the 50 year old couldn't come close to $4.50 per month for $50,000 of term life coverage.
There is no argument that having individual life and disability income insurance outside of an employer-sponsored benefit plan is usually an important choice. But for the average working stiff, the insurance made available to him/her through their employer's group plan, including optional additional coverage beyond the $50,000 basic amount many employees are provided, will be less costly than an individual policy of like amount. (And, obviously, a conversion policy to whatever form of cash value insurance the insurer makes available to employees who leave the group will be hugely more expensive than the term policy).
Don't forget that most group policies also provide the benefit on a guaranteed issue basis, which is not generally available to the average insurance consumer. The lack of individual underwriting accounts for a large part of the rate reduction in group term vs individual term.
If you wanted to compare Group UL policies with individual UL, the difference in the numbers is even more glaring.
Posted: Thu May 24, 2012 01:14 pm Post Subject:
Client: "I just had a baby. I want $250,000 of coverage. Can I get it less expensively outside of work than inside of work?"
Me: "Yes, assuming that you are healthy. A 20 year level policy will be cheaper for every year for the next 20 years and the rate will be guaranteed."
Max: "Sorry, that doesn't count. You should only compare it to insurance that is banded in a way that makes it more expensive. Let's ignore inexpensive coverage."
SGLI is a meaningless example because we are talking about Employer sponsored plans. SGLI is not employer sponsored.
We can agree that there are plenty of reasons to buy coverage outside of work outside of price.
We should also be able to agree about price for healthy people who are buying a decent amount of insurance. I have never seen an employer sponsored/ employee paid group plan that would save a healthy individual money over individual coverage for a not tiny amount of coverage.
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