Life

Life

Quote Sticky

Life Insurance

Group-term life insurance is a common employer-sponsored life insurance offering. This article discusses the basics of this coverage, plus important rules and considerations.

 

The Basics

Group-term life insurance is coverage that employers offer to employees only. Coverage may be employer- or employee-paid. Often, employers offer a specified benefit (flat fee or percentage of salary) that is cost-free for employees, then offer the option for employees to purchase additional coverage.

Because spouses and dependents are not covered under this type of plan, some employers also offer a separate voluntary plan to cover these individuals if employees choose.

 

Advantages

This coverage is generally very affordable for employers, because the group plan spreads the risk over many people so premiums tend to be low. Plus, if you take the time to educate employees about the importance of life insurance, offering this coverage can increase employees’ appreciation of their benefits package.

Group-term life insurance is also advantageous for employees. Employees get coverage that is either employer-paid or at least cheaper than a policy purchased in the individual coverage market. Another big advantage for employees is that most group-term plans do not require health assessments.

BottomBanner