Group life insurance can be an added benefit you offer your employees. This type of life insurance is offered by an employer to employees, typically as part of a larger group benefits package. As the coverage is purchased from the provider on a wholesale basis, the costs for each individual worker can be significantly lower than the cost of purchasing an individual policy.
How Does Group Life Insurance Work?
With group life insurance, the employer purchasing the policy for its workers retains the master contract. Employees may not be required to pay anything out of pocket to receive policy benefits, or they may have a portion of the premium deducted from pay. Employees who elect coverage under the group policy will receive a “certificate of creditable coverage.” When an employee leaves the company and terminates coverage, he or she will need to provide this certificate to subsequent insurance companies.
Types of Group Life Insurance
Employers have a variety of options when selecting a group life insurance plan. Types of group life insurance include:
- Term Life: Provides a cost-effect safety net for a set period of time.
- Whole Life: Provides portable coverage, accumulates cash value, and pays a benefit on the death of the insured.
- Universal Life: Portable and permanent life insurance that builds cash value.
Cost of Group Life Insurance
Employers typically pay a certain amount for every $1,000 in coverage per employee. The cost of the premiums will depend on a number of factors, including:
- Coverage amounts
- Medical underwriting requirements
- Type of business
- Number of employees
- Employee gender
- Employee age
Our agent at The Russell D. Patten Insurance Agency, LLC in Hermon, Maine, can help you shop for the group life insurance coverage that offers the most favorable benefits at the lowest rates.