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Group Life Insurance

Group Life Insurance

To business owners, providing the best interests to the employees is the primary goal to create a comprehensive benefit package. One of the components of the package is group life insurance plans that provide employees a lot at just a small premium to you.

It is the duty of the employer to research on the different insurance carriers and find the right one that provides plans that meet the needs of the employees. Some of the noted insurance companies are CIGNA, Minnesota Life Insurance and Aetna.

Feature of Group Life Insurance for employees

A general view on group life insurance can be had from that of the group life plans of Minnesota Life Insurance. Generally, group life insurance of different insurance companies includes the following:

  • A guaranteed coverage amounts that could be a fixed amount or salary based
  • No need of any health questionnaire or medical exam for basic coverage
  • Beyond basic coverage, there will be health questions as well as medical exam
  • Rates of premium depend on the group of employees and not on individual basis
  • There is less paperwork in this type of insurance as it is designed for groups
  • Payment is through electronic transfer or payroll deduction
  • Facility to convert group insurance policy into an individual policy when employee leaves the company

Group life insurance polices are available with the usual offerings of term and permanent coverage with insurance companies offering a basic level of coverage without charging any cost to the employee. In addition to the basic policy, employees have the option to buy supplemental insurance at own cost. There is also the option to update the policy for any change in family status like marriage, birth, adoption, divorce, etc. It must be noted however, that any increase in coverage would often require proof of insurability like health questionnaire as well as medial exam.

The other group life insurance available includes:

  • Group Universal Life Insurance - this type of insurance provides both coverage and cash value building
  • Variable Group Universal Life Insurance - this type of insurance offers flexible investment options

Employer's Group Life Insurance

Employers can offer its employees group life insurance at a minimal cost to themselves. The polices available include both term and permanent life insurance, with most employers going for term polices as the coverage are available for the duration for which employees work for the company.

Cost of Group Life Insurance

Group life insurance does not require any medical exams for basic coverage, only the risk is determined based on sex, salaries and age of the employees. To determine the premium, all the risk factors are averaged.

It is advisable to contact an insurance agent or broker to get more details as well as estimation of different policy costs.


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