What is group term life insurance?
Group term life insurance is a benefit offered by many employers to their employees under a single contract with an insurer. This benefit option is generally more affordable than an individual policy because the risk is distributed across the entire group instead of a single individual.
Benefits of Group Term Life Insurance
- Participants may not be required to answer health questions or submit to a medical exam during their initial eligibility or open enrollment period.
- Similar insurance amounts are generally less expensive than obtaining an individual policy. Many employers offer employees an additional benefit option for dependents at lower group rates.
- Employers may offer additional benefit riders to the group term life insurance.
Considerations with Group Term Life Insurance
- Employees should periodically assess their financial needs to ensure the amount of group term life insurance made available through their employer is enough. In some instances, additional insurance may be necessary.
- With group term life insurance, the employer sets the term period. Based on the term period, it may be necessary to research other insurance plans to find one that has a longer coverage timeframe than the employer offers.
Group term life insurance may help alleviate the financial burden on families who experience the untimely death of a loved one.