Group Life Insurance is a type of life insurance coverage provided to a group of people under a single contract, typically offered by an employer, organization, association, or union. It is designed to provide financial protection to the beneficiaries of the insured members in the event of their death.
Unlike individual life insurance policies, group life insurance covers many people under one master policy. The policyholder is usually the employer or the sponsoring organization.
Premiums for group life insurance are generally lower than individual life insurance due to the risk being spread across a large group.
Employees or members are often automatically enrolled, especially for basic coverage. Additional or supplemental coverage may require individual enrollment.
Basic Group Life Insurance: Provided at no cost or low cost by the employer. It typically offers a flat benefit amount or coverage based on salary (e.g., 1x or 2x annual salary).
Supplemental Life Insurance: Optional and allows employees to purchase additional coverage at their own expense, often through payroll deductions.
Basic coverage is usually guaranteed issue, meaning members are not required to undergo a medical exam. For supplemental coverage, some health questions or evidence of insurability may be required.
Most group life insurance is term insurance, meaning it provides coverage only while the individual is employed or remains a member of the group. There is no cash value or investment component.
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