What group life usually is
Most employer plans provide a basic amount of term life at no cost to you, commonly one or two times your salary, sometimes a flat amount like $50,000. Many let you buy supplemental coverage through payroll. It's guaranteed-issue up to a limit, which is its real strength: no exam, no health questions.
What happens when you leave
Coverage ends when employment does, sometimes at the end of that month. Two options usually follow, and both have short deadlines, typically 31 days from the date coverage ends:
- Conversion: turning the group term into an individual permanent policy with the same carrier, without proof of health. Convenient, but permanent coverage is priced accordingly, and the premium often surprises people.
- Portability: keeping term coverage in your own name through the same carrier. Not every plan offers it, and the rates rise with age.
Miss the window and the coverage is simply gone. The people it hurts most are the ones whose health changed while they were employed, because the group plan was the only place they could get coverage without underwriting.
Why it's rarely enough on its own
- The amount is set by a formula, not by your family. Two times a $60,000 salary is $120,000; ten years of that income is $600,000.
- It doesn't move with you. A job change, a layoff, or retirement ends it, usually at the age when replacing it costs the most.
- It's not yours to control. The employer can change the plan or the carrier.
What to do instead
Keep the work coverage; it's free or cheap. Then buy a policy in your own name, sized to the family's need and priced on your health today. A 20- or 30-year term policy bought in your thirties costs a fraction of the same coverage bought in your fifties, and it doesn't care who you work for. If you're leaving a job now, ask HR for the conversion and portability forms on your last day, and get a quote for an individual policy in the same week. Then compare.