What Is Group Term Life Insurance?
Are you wondering What is Group Term Life Insurance and how does it work?
Group Term Life Insurance is a group life insurance policy that provides coverage for one year.
The life insurance coverage is renewable at the end of each year. Renewable means the coverage may be continued for another year.
Group life insurance is "Experienced Rated", meaning the renewal premium offered upon renewal of the group policy is based on such factors as the loss record (number of deaths) of the group insured, and the range of insured employees ages.
In a group term life insurance policy, all employees are insured by the policy.
Coverage provided by the group term plan is temporary, as the policy period is for one year at a time.
Also, upon termination of employment, the employee usually does not convert their term life coverage to a permanent life insurance policy, because the premiums are much higher.
Group term life insurance usually provides limits of coverage up to 1-2 times your annual salary, or income. Or, it may provide the same level of coverage to each employee.
Also, some plans may be paid 100% by the employer, allowing for additional coverage to be purchased if paid by the employee. Plans and coverage amounts may vary by the insurer offering coverage, and which type of plan is chosen by your employer.
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