What are the pros and cons of obtaining life insurance through an employer versus buying an individual life insurance policy on my own?

Many employers offer group life insurance as part of an employee benefits package, along with health insurance, disability insurance, a retirement plan and other perks. In some cases, the employer pays 100 percent of the premium--providing life insurance with no cost to the employee. In other cases, the employee pays all or part of the premium and can choose whether to purchase through the employer's group life insurance plan.

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Getting life insurance for free or at a bargain price is an obvious advantage if your employer picks up part or all of the tab for the coverage. Another advantage is you don't have to undergo a medical examination or fill out a health questionnaire as you would for a standard individual life insurance policy.

If your employer's paying for the coverage, there's no disadvantage to accepting it. But there is danger in assuming that coverage is enough to provide the financial protection your family needs. Typically employer-sponsored group life insurance provides a relatively small amount of coverage, such as $25,000. That's probably not enough if you have young children, a mortgage and other debts.

In addition, in most cases the coverage ends when you leave the company. So if you're laid off or quit, the life insurance disappears. If you have no other life insurance in place, then you're without any protection.

Consider purchasing an individual life insurance policy that's designed to fit your family's needs. Consider term life insurance if money is tight. Term life has no cash value savings and provides coverage if you die within the policy's term, such as 10, 15, 20 or 30 years. You choose a term that coincides with your family's greatest needs, such as those years before the kids are grown up and the mortgage and college education bills are paid off. Term life is inexpensive, particularly for young, healthy people.

Permanent life insurance, such as whole life and universal life, is much more expensive than term life, but it covers you for the rest of your days, no matter when you die, and includes a cash value savings account.

Most term life insurance policies allow you to convert them to permanent life insurance within a certain timeframe. For more, see "Term life insurance: the option 99% of policyholders ignore."