You can buy life insurance through an individual
policy or a group policy. You can buy an individual policy from an insurance
agent or through the mail. Often you must pass a medical examination to
qualify.
You usually buy a group policy through your employer or an organization
to which you belong. Your employer may pay part of your premium as an employment
benefit. Unlike health insurance, rates for group life insurance rates may
not be lower than individual rates. However, you usually aren't required
to pass a medical exam to qualify for a group policy.
Group insurance is often term insurance. When you leave a job, you may have
the opportunity to convert your group insurance coverage into a term or
whole life individual policy. Some group policies can also be continued
into retirement. (Both term and whole life insurance are discussed in the
next section.)
When you apply for a loan or mortgage, you can buy credit life insurance
from the lender. Credit life insurance pays the remaining balance on a loan
to the lender if you die before you repay the full debt. You don't need
credit life insurance if you are already adequately insured. But if you
have health problems that make life insurance difficult or expensive to
buy, credit life insurance might be worth considering. Otherwise, it is
almost always more expensive than other life insurance coverage.