The Importance of Group Life Insurance
Do you know what group life insurance is? It is a term insurance providing coverage to a group of people who are usually members of a union or employees of a company. The underwriter takes under consideration the financial strength, turnover and size of the group.
However, group life insurance provides the option to enable a member purchase an individual insurance when he/she exits the group. The group life insurance provides employee benefit package that has a low and reasonable group coverage cost in comparison to the cost required by individual coverage. If your employer provides a group life insurance, always be wise to accept it.
In this kind of insurance, the master contract (the actual insurance policy) remains with the employer or the policy owner. The members will receive a certificate of insurance each. The group life insurance allows you to choose your beneficiary. Furthermore, your employer will be paying for most of the premiums and the amount of your coverage will be most likely once or twice your annual salary.
The types of Group life insurance
- The group life insurance normally extends for a year, though it is renewed every year. Both the employer as well as the insurance company decides on whether to continue with the insurance.
- Companies also provide individual insurance policies that are bought at the place of employment. There is also a company representative offering the group life insurance for answering your queries regarding group and family coverage.
- There are other group plans, which have cash value insurance as an option. The employee through the salary deduction can purchase the group universal file offered by the employers.
- The other group life insurance policies include some business-related plans like the split dollar insurance where you can buy individual policies.
Benefits of the group life insurance over individual insurance policies
It has guaranteed coverage amounts and unlike the individual insurance, it does not engage full physical complex processes.
The administration and billing systems in the Group life insurance require less paperwork for your employer. The insurance company handles all the details and sometimes takes up the entire administration of the policy.
Unlike the individual insurance, Group life insurance payments can be made through the payroll deduction or electronic funds transfer.
The Group life insurance coverage is also convertible to the individual policy, allowing you to keep your coverage even when you leave the group.
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