Are You Part of a Group Life Insurance Policy?
1. What is group life insurance?
Group Life Insurance is life insurance offered by an employer to its employees. So, the “Group”often receives it ass part of its benefits package. The employer does not have to purchase a large number of individual contracts. Instead, the employer owns one policy (called the “master contract”) that covers everyone in the group. Thus, apart from the benefits of simpler administration or lower premiums, an employer may offer group life insurance as an incentive for highly skilled members of the workforce to work for its company. Group life insurance can also be purchased by organizations for their members.
2. How is group life insurance usually structured?
Group Life Insurance is most often obtained as a “term” policy that is renewable every year, and the amount of coverage is often equal to your salary (or double). Group life insurance policies can be “employer-paid” (the employer pays the entire premium for you, “employee-paid” or “voluntary” (you pay the entire premium, or “contributory” (a hybrid of the other two – the employer pays part of the premium and you pay the rest).
3. How much does group life insurance cost?
Some employers and organizations pay for part or all of the insurance premiums on behalf of the employee or member. Regardless, the cost to the employee or member is usually much lower than if they bought an individual policy on their own, simply because the employer or organization typically pays a wholesale price. If it is offered, it is a good idea to agree to be covered by the group life insurance policy offered by your employer or organization – especially if you don’t already have life insurance or your coverage is not as good as what is offered by the group policy.
4. Who can get group life Insurance?
The employer buying the policy can decide who gets covered by it. Most often, an employee has to have worked for the employer for a certain amount of time before they are allowed to be added to the policy. Employers can choose to cover all their employees or particular types of employees only (e.g. managers, permanent full-time). You can ask your employer for the eligibility criteria.
5. What do I have to do when I am added to the group life insurance policy?
In most cases, you will receive a document you can use as proof of insurance – e.g. a certificate of insurance or a certificate of “credible coverage”. This will typically set out the terms of the policy as it relates to you. You will pick a beneficiary or beneficiaries (the person or persons who would receive the amount of money for which you are covered, if you died while covered by the policy).
6. How long am I covered under group life insurance?
This depends on the term of the group life insurance policy. It could be only as long as you are employed by the policy owner, or there could be a specific term. Your employer or certificate should set out how long you are covered.
7. Is the certificate of insurance the actual insurance policy?
No. The employer gets that. The certificate of insurance is your way of proving that you are covered under the policy. The document will have your policy information, including policy number. There may be times this policy information must be shared. A copy of the certificate of insurance may need to be provided, for example, if your beneficiary needs to prove to a funeral home that expenses will be covered by the insurance company.
Contact the professional insurance agents at Insurance Direct 123 today for more information on Group Life Insurance. You can’t afford not to!