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Home / Life Insurance / Articles / Life Insurance General / Should I Rely Only on Employer Group Term Insurance or Buy a Pure Term Plan?

Should I Rely Only on Employer Group Term Insurance or Buy a Pure Term Plan?

Neviya LaishramJan 14, 2026

No. You should not rely only on employer-provided group term insurance.

While it is a useful benefit, it usually offers limited cover and ends when you change or leave your job. For long-term and reliable financial protection, a personal pure term insurance plan is important, as it stays with you regardless of employment and can be tailored to your family’s needs.

Illustration of a man comparing employer group term insurance and a pure term plan, shown with two clipboards labeled “Employer Cover” and “Pure Term Insurance” and a question mark above, representing a choice between insurance options.

Contents

The Role Employer Group Term Insurance Plays
Why a Pure Term Plan is Structured Differently
Employer Cover vs Pure Term Plan: Key Differences to Know
Why Relying Only on Employer Cover Can Create Gaps
When a Pure Term Plan Becomes Non-Negotiable
ACKO Life Insurance: Keeping Protection Pure
Final Thought
Frequently Asked Questions

The Role Employer Group Term Insurance Plays

Employer group term insurance is essentially an employee benefit rather than a long-term family protection solution. It is designed to provide a basic layer of life cover during the period of employment and is usually offered at no cost or at a low cost to the employee.

Group coverage is normally uniform. The amount of the sum assured is usually a proportion of the salary, for example, one or two times the annual income, and policy terms are set at the group level. This is certainly a very user-friendly cover, but it also limits flexibility and coverage adequacy.

Above all, this protection is a direct extension of your job. Thus, changing employers, taking a career break, retiring, or experiencing an involuntary loss of employment would mean that the insurance policy is discontinued. That makes group term insurance very helpful, but, by nature, a temporary cover.

Why a Pure Term Plan is Structured Differently

A pure term insurance plan is designed with an entirely different goal in mind. It is meant to protect your dependents financially in case of your untimely passing, regardless of your employment status.

You select the policy term based on the duration your family will require financial support, and you figure out the coverage amount based on your liabilities, lifestyle needs, and future responsibilities. The policy is yours as long as you pay the premiums, and it is unaffected by job changes or career shifts.

Since pure term insurance is solely about protection and doesn't take into account savings or returns, it is possible to get higher coverage at relatively lower premiums. The focus is not on convenience, but on continuity and adequacy.

Employer Cover vs Pure Term Plan: Key Differences to Know

The difference between employer-provided life insurance and a personal pure term plan is not about which one is “better.” It’s about what each is designed to do. The table below explains this clearly.

Aspect	Employer Group Term Insurance	Pure Term Insurance Plan
Purpose of the cover	Basically, a company life assurance is an arrangement where the employer provides a policy to cover the basic life cover needs of employees during their period of active service. The idea is to use it as a supplement to your own protection planning rather than as a replacement.	It is a life insurance policy purchased for a specific period, as it aims to protect your family's financial needs in the event of your untimely death.
Continuity of coverage	It is very common for the insurance to stop when you leave the company or retire, or even if you get laid off, so it really depends on how steady your career is.	Even if you change jobs, take a break, or work for yourself, your cover will still be there provided that you keep on paying the premiums.
Adequacy of sum assured	The sum assured is usually limited and tied to salary, which may not be sufficient when the level of responsibilities increases.	This product gives you the option of selecting a coverage amount that is in line with your loans, dependents, and other long-term obligations.
Flexibility and customisation	You hardly have a chance to pick your terms or add riders, because the plan is standardised for all employees.	You will have more freedom to choose your policy term, how your coverage shall be structured, and what additional benefits, like critical illness or accidental death coverage, will be included.
Long-term relevance	It makes sense at the beginning of your career, but as financial obligations increase and your career changes, it becomes less dependable.	Designed to remain relevant during peak earning and responsibility years, forming the core of long-term protection.

Why Relying Only on Employer Cover Can Create Gaps

Employer group term insurance is a helpful benefit, but it is often limited in scope. Since the cover is provided automatically, it can feel reassuring and may reduce the urgency to review personal protection needs.

In reality, the coverage amount may not keep pace with growing liabilities, and the lack of portability means protection can disappear precisely when uncertainty is highest. For families dependent on a single income, this gap can be significant.

When a Pure Term Plan Becomes Non-Negotiable

A personal term plan is particularly significant when you have:

Family members who depend on your income
Commitments that stretch over a long time, like a home loan
Children's education or other future goals that require planning

Usually, at this point, the coverage provided by the employer is not sufficient.

ACKO Life Insurance: Keeping Protection Pure

At ACKO Life Insurance, a protection-first approach is followed through pure term insurance. The policy is intentionally limited to life cover alone, without returns, investment-linked elements, or bundled features. This keeps the purpose clear and the coverage predictable, so families know exactly what the policy is meant to provide.

By keeping protection focused and unmixed, insurance is allowed to do its job without added expectations. At the same time, decisions around savings and wealth creation can be made independently, using financial tools better suited to those goals.

Click here to learn more about the ACKO Life Flexi Term Plan.

Final Thought

Employer group term insurance is indeed a valuable perk and should not be overlooked. However, it is primarily designed for convenience and may not cover all protection needs. A personal pure term insurance policy, on the other hand, is meant to stay with you through life’s changes and provide dependable financial protection to your family when they are in need.

From a long-term financial planning perspective, your own term plan should form the primary layer of protection, with employer cover playing a supporting role.

Frequently Asked Questions

Below are answers to some frequently asked questions to help you better understand the topic.

Should I rely only on employer group term Insurance or buy a pure term plan?

Although employer group term insurance is a helpful benefit, it is generally not enough, at the very least. The protection is generally small and terminates when you leave the job, thereby creating gaps in future protection for your family.

What happens to group term insurance if I change jobs?

Typically, employer group term insurance ends when you leave your job, whether due to resignation, retirement, or involuntary separation. In most cases, the coverage is not portable, meaning you cannot carry it forward after leaving the employe

Why is a pure term insurance plan considered more reliable?

A pure term plan, owned by you, remains active as long as premiums are paid and provides consistent protection, regardless of job changes or career breaks.

Can I have both employer group cover and a personal term plan?

Yes. Many people treat employer group term insurance as an additional layer of cover, while relying on a personal term plan for their main, long-term financial protection.

When should I consider buying a pure term plan?

A pure term plan becomes important once you have dependents, loans, or long-term financial responsibilities. Buying early also helps, as cover is usually more affordable and easier to get when you’re younger.

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