What is Group Life Insurance?
Group life insurance is a type of life insurance policy that provides coverage to multiple individuals under a single contract. Typically, this type of insurance is offered by employers or organizations as part of a benefits package for their employees or members. The key advantage is that it allows companies to cover a larger number of individuals at a lower cost compared to individual life insurance policies.
Key Features
- Cost-Effective: Group life insurance often has lower premiums due to the shared risk among the group members.
- Coverage Amount: The coverage amount is usually determined based on the employee's salary or a fixed group rate.
- No Medical Underwriting: Most group life insurance plans do not require individual medical exams, making it easier for individuals to obtain coverage.
- Portability: Some policies allow members to convert their group coverage to individual policies if they leave the organization.
Types of Coverage
Group life insurance generally comes in two forms: term life insurance and whole life insurance. Term life provides coverage for a specific period, usually matching the duration of employment, while whole life offers lifelong protection and may include a cash value component.
Eligibility and Limitations
Eligibility for group life insurance typically includes full-time employees or members of an organization. It's important to note that coverage can be limited or not portable once an individual leaves the group.