GROUP LIFE INSURANCE

Your Employees Could Benefit from a Group Life Insurance Policy

Life insurance helps people provide for their loved ones if they unexpectedly pass away. For individuals who have jobs and earn an income that their families rely on, this is an especially important type of insurance. Businesses and other organizations can help their employees obtain coverage by offering group life insurance in benefits packages.

What is Group Life Insurance?

Group life insurance provides life insurance coverage for multiple people who are part of a defined group. In most cases, a business, government, membership organization, or similar entity is a policyholder, and its employees or members receive the life insurance coverage. As the policyholder, the business or other entity typically receives the actual policy paperwork, and covered individuals might get a certificate of insurance for their own records.

Who Pays a Group Life Policy’s Premiums?

A group life policy may be set up so that a business or its employees pay the associated premiums. In some cases, businesses provide a basic amount of coverage for employees, and employees who want more protection can choose to pay for additional coverage.

How Much Group Life Coverage Do Businesses Offer?

The amount of coverage that businesses and other entities offer varies greatly. Some only provide a nominal amount of coverage, sometimes just $1,000, while others offer coverage equal to several times an employee’s annual salary.

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What Kinds of Group Life Policies Are Available?

While there may be a few group life policies that offer whole life insurance, most provide term life insurance. Coverage typically expires when an employee’s employment ends or when the policy’s term is over.

Do Employees Have to Enroll in a Group Life Policy?

Whether or not employees must enroll in a group life policy depends on how the policy is set up. If the premiums are fully paid by the business or other entity, employees may be automatically enrolled. If employees pay at least a portion of the premiums, they may need to sign up for the policy before they have coverage.

Even when employees are automatically enrolled, they should still be familiar with the policy. It’s often a good idea for employees to choose a beneficiary for their benefits. A beneficiary is someone who will receive the funds if the employee passes away.