Group Term Life Insurance

Group Term Life Insurance


Group Term Life Insurance Harman Stone

Group term life insurance is insurance coverage offered to a group by an employer or other organization.  The coverage provides a benefit to the beneficiaries if the covered individual dies during the coverage period.  Group term life insurance is generally less expensive than an individual policy.  Group term life insurance is often a key component in employee benefit packages.

Group term life insurance is made available to eligible employees at the completion of their porbationary period following their hire date, or during open enrollment.  Most group term life insurance coverage is simple for which to apply.  Applicants are not subject to medical underwriting.  The insurance company providing the policy pools the risk of all employees or members to adequately price the risk.  Group term life insurance remains in place as long as the contract remains paid by the employer and the employee continues to work for the company.  Additional term coverage is often available as an option and is paid for by the employee.  Once employment terminates, group term life coverage expires.


Employers that offer group term life insurance often limit the total amount of coverage available to employees based on a variety of factors, such as time in service, annual income or number of dependents.  Amounts are limited because insurance carriers do not collect health information from individuals covered by the policy.  An employer typically offers group term life insurance coverage at no cost to the employee up to $50,000, but the base amount varies.  If an employee chooses to add supplemental coverage, he can do so up to certain limits, such as $500,000 or five times their annual salary.  For dependent or spousal coverage, group term life insurance is often capped at $100,000 for each additional insured.  Any group term life coverage offered by an employer that exceeds the base benefit is paid by the employee through payroll deduction.

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