Group Life Insurance
What is Group Life Insurance?
Group Life Insurance is a type of life insurance that covers an entire group of people with a single contract. This is usually offered to employees as part of their benefits package. Usually, the employer or an entity such as a labor organization is the policy owner. The policy owner is the one who keeps the actual insurance policy and those who are covered are usually given a certificate as proof of insurance.
Group Life Insurance is cheaper than individual life insurance. Insurance companies are able to give bulk rates or discounts as they have less paperwork and less time to sell to each individual. It is also the belief of the insurer that not all the employees insured will remain with the company until they retire. And also, the likelihood that the entire group dying is far less likely than if you base it off of one person.
Advantages of Group Life Insurance
1. There is no mandatory medical examination. This would benefit those who have chronic disease as it is difficult for them to get their own life insurance.
2. It is tax deductible since group life insurance is part of the wages you pay.
3. Making it a part of employee benefits, it would boost the morale of all workers.
4. Group Life insurance policies can be customized according to the needs of a company.
5. You have the option to convert Group Life Insurance to an individual policy if you leave the company.
The Downside
1. If you change your job, you will lose your life insurance coverage. The benefit is only good while you are working with the same company.
2. Features and options for this Life Insurance is limited. You will not be able to get the full coverage as this will cost more for the employer.
3. Coverage is not enough to take care of your beneficiaries. This is true especially to those who stand as breadwinners in the family.
