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Group Life Insurance- Most Popular Life Insurance Plan for Organizations

By Bappi Roy Subscribe to RSS | June 20th 2012 | Views:

Group Life Insurance

Group life insurance provides a means for insuring a group of individuals, multiple persons such as some or all employees of a business or members of an association under one insurance policy. Depending on the policy of a group life insurance, the insurant may receive life insurance coverage as an employee benefit and make a contribution to the cost as a pay part, or may pay for the group life insurance policy on his or her own.

How does a Group Life Insurance Work?

Actually a group life insurance works in the same way as a regular life insurance policy by paying out a predetermined sum if the policyholder dies within the term of a policy. In this case the insurance companies would insure as a group rather than qualify for insurance individually. Any health evidence is generally not required to obtain the coverage here. The employee and the employer may share the cost of coverage, or only the employer may pay the entire amount. In order to the pay out of the death benefit, the employee must be employed by the organization still at the time of their death.

Group Life Insurance VS Individual Life Insurance

For a lot of employees group life insurance has some attractive plans and benefits to obtain extra coverage. Comparing with the individual policy, group life policy can provide the extra coverage at cheap premiums. Unlike an individual life insurance policy, group life insurance coverage is not based on the risk associated with an individual person. Group life insurance policies are established based on the risk factor of the group as a whole. When a person includes into a group life insurance policy, he or she cannot get rid from the group life insurance coverage as long as he or she remains in the group.

Benefits of Group Life Insurance

Group Life insurance is planned to be beneficial for both the employer and the employee.

Benefits to the Employer:

By providing group life insurance to the employee, an employer can show his or her genuine cares for the staff welfare as well as gaining the loyalty and higher morale.

Reduce the rate of turnover, saving the money for hiring and training costs.

The insurance premiums are usually allowable as a business expense and thereby it reduces the net cost to the employer through corporation tax relief.

Possible to provide valuable life insurance protection at a low group rate.

Benefits to the Employee:

In group life insurance, the high-risk individuals in the group are balanced with the low-risk ones. So, this is especially advantageous for high-risk individuals.

Any kind of lump sum benefit is normally payable outside an employee’s estate and it is free from inheritance tax liability.

Cover can be continued for a long period of time.

Group Life Insurance Policy Offered by My Life Insurance Rates

My Life Insurance Rates offers three policies for Employer Group Life Insurance. These are:

* Whole Life Group Insurance

* Universal Life Group Insurance

* Term Life Group Insurance

Each three policies have also the options like Guaranteed Issue, Conditional Guarantee and Simplified Issue. The company determines the eligible option for any group or organization according to their eligibility, participation percentages and total number of applications submitted. Premiums are level for the contract period and the death benefits are level and locked in until contract termination.

Bappi Roy - About Author:
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