Individual Life Insurance
Definition - What does Individual Life Insurance mean?
Individual life insurance is a policy that is paid by one person and covers a single person. It is distinguished from group life insurance, which covers employees of a company or members of an organization.
This insurance is intended to meet the financial needs of a surviving spouse or family members in the event of the insured's death.
Insuranceopedia explains Individual Life Insurance
Individual life insurance is more expensive than group life insurance. Since the risk is concentrated in a single person, the policyholder cannot take advantage of the savings that come when risk is distributed among a group.
Individual life insurance, however, has more flexibility in terms of coverage, allowing the policyholder to choose the coverage they want. With a group life insurance, on the other hand, the insured has to settle with the coverage that is offered. Those insured by a group policy do, however, have the option to expand coverage by paying additional premiums.
Individual life insurance has a death benefit for the named beneficiary. This benefit is aimed to easing the burden of survivors who must cope with the financial loss associated with the insured's death.
Two of the more popular individual life insurance policies are term life insurance and whole life insurance.