Getting individual life insurance is not that cheap. One must allocate a certain amount to pay the premium for you and your loved ones to be covered with protection during times of uncertainty or when you pass away. Though one has regular employment, income is not sufficient to cover the premium. So to solve such inconveniences, the insurance company has this type of insurance that gives protection at a lower amount called group life insurance.
Suppose you’re an employee and do not have enough budget to pay life insurance, and your employer offers you group insurance. In that case, you must grab that opportunity as paying premiums for this life insurance is lower than the individual life insurance. If your employer is more generous than you think, you might end up not paying the premium for this policy as the employer may pay the premium for this group insurance.
Group Life insurance is a type of life insurance that gives protection for a group of individuals, such as employees of the company, that may be classified according to the department, pay, duties, or location that was not formed intended for getting life insurance.
Group Life Insurance is issued with a One Master Policy issued to the employer as the employer is usually the owner of the policy. The certificate of coverage is given to all the employees who joined the group insurance. An enrollment card is issued to all employees who intend to join the group insurance. Paying premiums may be non-contributory, wherein the employer pays the insurance, or contributory, wherein the employer and the employees shares in paying the premium.
Group Life insurance covers the death of the employees regardless of cause except for suicide during the first or second year of the policy. There is also a requirement that each group member should work for a minimum of 30 hours per week. Group members are given an enrollment card instead of an application form. This is to signify their intent to join the group. A certificate is issued to each individual member. The Master Policy is given to the employer, who is usually the representative of the group. Typically, the range for this life insurance is equal to one to a two-year annual salary. Group Insurance may provide group medical insurance, group permanent insurance, group retirement insurance, and the most common type of insurance, yearly renewable term insurance or GRYT. This has the lowest initial cash outlay but tends to increase the premium every time the policy is renewed.
Group Life insurance has a conversion privilege. It can be converted from group coverage to individual policy. Still, the premiums apply to the age at the time of conversions, and more importantly, proof of insurability is not required.