Group Life Insurance Tips

Read these 5 Group Life Insurance Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Life Insurance tips and hundreds of other topics.

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Group Insurance for Freelancers

If you are a freelancer, you may not have access to a group insurance plan through an employer--but ou still need coverage. If you have a chronic illness and can not qualify for individual coverage, you might consider joining a union in your discipline. Many freelance disciplines have unions (such as The National Writer's Union) that offer group health insurance once you've joined.

What is SGLI Coverage?

Tips on Group Life Insurance for Servicemen

Life insurance carriers manage risk. Too many claims and the carrier cannot be certain of being around long enough to meet the needs of its policy holders. The need to balance risks means certain groups - such as members of the military - are less insurable than others. Members of the military can still find good coverage.

This low cost insurance coverage is available to active duty military members, members of the Reserve Officer Training Corps, ready Reservists and others with duties that put them at high risk of death and disability.

  • Coverage is available in increments of $50,000 up to the maximum amount.
  • Premium payments are calculated based on the value of the policy, not the age of the policy holder.
  • Policy holders may elect to convert to a:
    • Veteran's Group Life Insurance Plan (VGLI) – service members should be mindful of conversion deadlines when planning their policy conversion; or
    • Commercial Insurance Plan – Service members should contact the Office of Servicemembers' Group Life Insurance (OSGLI) for a list of participating companies. Generally, members will not need to provide proof of good health. Members should expect to provide proof of coverage, which can be obtained from OSGLI.

What is the Federal Employees Group Life Insurance Plan?

Tips on Federal Employees Group Life Insurance

Employees of the Federal Government may elect to participate in the Federal Employees Group Life Insurance plan (FEGLI). As you may have guessed the plan, established in 1954, is the largest group life insurance plan in the world. The following tips offer a brief overview of the plan.

Tip 1. FEGLI Participants Contribute to Insurance Costs

  • Generally, the government pays for 1/3 of the coverage cost for the basic plan. Employees are responsible for the difference. Premium payments are made through a payroll deduction plan. There are three coverage options available in addition to basic coverage.
  • New employees are automatically enrolled in the basic program. Employees can waive coverage if they choose not to participate. Optional coverage must be elected.
  • Basic coverage is usually equal to the amount of the employee's annual salary plus a predetermined additional amount.
  • Term policies do not build cash value.
  • Portability refers to an insured's ability to maintain coverage after employment has ended. The benefits of Federal Employees Group Life Insurance do not continue beyond employment although some policies may be eligible for conversion.

Why Offer Employee Group Life Insurance?

Tips on Group Life Insurance as an Employee Benefit

Many employers now offer employee group life insurance as a benefit for staff members. In today's workplace, employers are constantly seeking ways to foster an environment that builds morale thus increasing productivity and decreasing turnover. Employee group life insurance is also an attractive benefit that increases an employer's appeal to well qualified candidates.

These policies offer needed coverage for employees at attractive rates for employers. Employers considering group term life insurance may be surprised to learn that there are no tax consequences of these policies under certain conditions (for example, on group term insurance coverage amounting to $50,000 or less, and carried directly or indirectly by the employer).

Employers with concerns about cost or very limited budgets can still offer employee group life insurance using one or more of the following strategies:

  • Offering policies with a face value that covers only final expenses
  • Offering the opportunity for employee contribution
  • Restricting enrollment to full-time employees
  • Delaying new employee enrollment for a specified period
Your employees are probably are very diverse group. There is wide variation in age, health history, nicotine use habits and so forth. Employers should evaluate several proposals to get the best coverage for employees at the best cost.

What is Group Life Insurance?

Tips on Group Life Insurance

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.

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Byron White