Group Life Insurance

Like group health insurance, a group life insurance policy is typically part of a benefits package provided by an employer or other entity, such as a labor organization, that covers an entire group of people through a single contract.

The advantage of a group life insurance policy is that the cost of group coverage is usually far less than what the individual members would pay if they were to pursue life insurance coverage on their own. If you are part of a group that is offering such a benefit, it may be in your best interest to take advantage of this form of affordable life insurance, especially if you dont have another form of life insurance coverage, or if your personal coverage is not adequate.

In a group policy, the employer or other entity is generally considered the policyholder, and holds the actual insurance policy, known as the master contract. Members of the group typically receive a certificate of insurance, which serves as their proof of insurance in case of a claim. As with any other type of life insurance, individual members may choose their own beneficiaries.

The most common form of group insurance is typically term life insurance, provided in a yearly renewable contract. If your employer is providing the group insurance policy, generally, it is the employer who pays for most (and in some cases, all) of the premiums. The amount of coverage varies, but term life benefits under a group policy should usually be enough to cover one to two times your annual salary.

Term coverage under an employer-sponsored group policy typically remains in force until you leave the company, or until the end of the specific coverage term. If you leave your current employer, you may be given the option to convert your group coverage to an individual policy. However, for most people, choosing to convert group policy coverage may result in higher premiums than those generally available through a comparable individual term life policy. Unless you are otherwise uninsurable, it may be advisable to shop around and compare affordable life insurance policies before choosing the conversion option.