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What is Group Life Insurance?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 29 November 2016
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Group life insurance is a life insurance product designed to cover a group of people as a whole, rather than being written as a series of individual policies for specific people. This product is most commonly made available to employees of a company or members of a professional or service organization. People can opt into the insurance plan and will be able to name their beneficiaries and change them as needed. If they leave the group for any reason, they have the option of retaining the insurance and converting to an individual policy, or letting the insurance lapse.

Insurance companies offering group life insurance base the policy fees on the risks of the group as a whole. An administrator holds the policy documentation on behalf of the company or organization, and individual people in the group are named and receive certificates indicating they are on a group life insurance policy. The certificates provide information about available coverage and how to claim coverage, and also designate a beneficiary for the policyholder.

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In some cases, group life insurance may be paid for entirely by the administrator, taking the form of a benefit. Buying insurance for groups tends to be less costly than purchasing individual policies and it may be deemed a shrewd business move to provide coverage to employees or members of an organization. In other cases, the policy is partially paid for and people who want life insurance must provide the rest of the payments, but the rates are still cheaper than individual policies, creating an incentive for people to join the group policy.

Levels of coverage offered with group life insurance vary. Information about the amount of benefits available is provided to allow people to make an informed decision about whether they want to join the policy. People who want to leave the group but stay insured, usually because they are concerned about not being able to get insurance on their own, may be able to adjust the amount of benefits available when they convert their policies to individual life insurance plans.

Most insurance companies offer group life insurance, as well as other group insurance products. Companies and organizations considering life insurance for their employees and members should meet with an insurance agent to discuss options. Sometimes, it is possible to get a package deal with steep discounts, allowing for bundling of services like health and life insurance. Insurance agents can provide information about the plans and options available.

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Rotergirl
Post 2

@Pippinwhite -- My company is going to start offering group life insurance, so I'm glad to hear it's so much cheaper than the individual policies. That doesn't really surprise me, since I know it's always cheaper in the long run to insure a group than it is an individual.

I'll check with HR about policies, coverage and rates, so I can pick the best one for me. I'm sure there will be an upcharge for my husband, but I feel like I need to have him on there, too, just in case. You never know what might happen, which is, I guess, the point of having life insurance.

Pippinwhite
Post 1

My company offers group life insurance and I'm glad they do. It's good coverage and also offers an accident policy, in case something happens to either me or my husband that isn't fatal, but is life-changing.

I see all the commercials on TV about life insurance policies, and while I know it's a good idea, I'm just as glad I have coverage through my job. I don't pay nearly as much, and I get great coverage. if I ever leave this job before retirement, I want to take the policy with me, if they'll let me. I'm sure the price will go up if I do, but I still want that coverage.

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