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What is group life insurance and how does it work? Read the following tips to learn about this valuable employee benefit.
Employee group life insurance provides protection for several people under one policy. Such plans are usually owned by the employer. In other words, the employer is the policy holder although each employee chooses their own beneficiaries. Upon enrollment, employees should expect to receive a certificate of coverage. The actual policy remains with the employer.
These policies are generally less expensive than individual policies. Because employers offer group term life insurance as a benefit they often shoulder most or all of the cost. Employees sometimes have the option of adding additional coverage at very attractive rates.
Because employee group life insurance is a benefit it is usually discontinued upon termination of employment. Some group policies may only provide coverage for a specified term. Employees should be aware of the conditions for maintaining coverage and plan for alternative insurance coverage if necessary.
In some cases your employee group life insurance plan may be convertible to an individual plan but the rates are often significantly higher.