Life Insurance

About Group Life Insurance

Group life insurance is where life insurance is obtained from an employer. This insurance form is offered as part of the benefits package provided to employees. It is a risk for an employer to not have any insurance plans in place for employees, as a company’s invaluable resources are its employees. At the same time, the cost of providing so many employees with life insurance converge can be a daunting task. This is why employers resort to group life insurance coverage. It is an economical way for them to offer insurance benefits to employees as when insurance policies are purchased in bulk, the employer gets a reduced rate from the insurer, while at the same time they are able to give the required coverage needed for their employees.

The standard time period for a group life insurance policy is one year, after which the employer can choose whether or not to renew it for a particular employee. In this form of insurance the employer is the policyholder and the employee is issued a certificate for their coverage as part of the group insurance plan.

As far as the payment issues are concerned, in most cases the employer pays for the insurance premiums. In some situations the employee is required to pay a portion of the cost of getting insurance. There may be instances wherein the employer offers non-group insurance policies to employees. Here the employee can buy an individual life insurance policy at the work place from a representative of the company from which the employer chooses to provide insurance.

The policy holds good till the time of employee retirement. In case the employee decides to move to another company, they have the option to continue with coverage, but they will pay the premium instead of their employer. If the employee dies when the policy is in place, the mentioned beneficiaries receive payment from the insurer. The amount received depends on what the employer has opted. In case of small companies the amount received by beneficiaries is small, while in the case of large employers it can go up to something like $200,000.

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