Group Life Insurance Is The Best Option For Some
Group Life Insurance is life insurance in which a single contract covers the whole group of people who share some qualifying characteristic or membership. Often the group members will be employees of either a public or private company. They may be members of a pension fund, union or organization. Or they could be customers of a bank or an insurance company.
Usually all of the members of the group who opt for coverage will receive a certificate of insurance. This serves as proof of the group life insurance but it's not actually the insurance policy.
Most of the time group life insurance is a yearly renewable term life insurance policy and the insurance company will base the group life premiums on the overall risk of the company or group.
Insurance companies alone determine insurability and some people, because of health or lifestyle issues, are considered uninsurable. An advantage of group life insurance is that it is easier for people with health problems to enroll because often there is no requirement to provide evidence of insurability. This can be especially helpful for people with chronic illnesses. It may mean the difference between being able to get insurance and not being able to get any insurance. In that case it makes sense to take advantage of any employee or group membership life insurance policies available. Group rates may also be lower than individual term rates for older age groups. Offsetting these benefits is the fact group life insurance policies generally offer fewer choices than a comparable individual policy. Since this is insurance for a group, the policy owner is the one who chooses the benefits of the plan (sometimes in consultation with a union) but each member is allowed to choose their own beneficiary. Another potential disadvantage of a group life insurance policy is that it is generally canceled when you leave the company or group that sponsored the program. However, many group policies include a provision that allows the policyholder to convert to an individual policy at regular rates without medical examination. Look carefully at the policy details to find out conversion and portability guidelines. There usually is a short time frame to take advantage of this option. Some group policies will offer accelerated death benefits, which allow terminally ill individuals to collect all or part of their life insurance before death. It is usually possible to get a small amount of coverage under the group policy for spouse and dependent children. Each individual has a different need for life insurance depending on their financial and personal obligations - whether they have children or a mortgage may make a difference. Many group policies let individual members apply for optional additional coverage. It may be necessary to provide evidence of insurability to be approved. Group life insurance is really intended to supplement an individual's life insurance coverage. For those who are challenged to qualify for any individual coverage, group life insurance may be the only workable option.
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