Group life insurance: is it for you?


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The best life insurance companies offer policies that can provide your family with a crucial source of income after your death. However, before you go ahead with purchasing a life insurance policy, you should first check any group life insurance coverage you may be eligible for, either through from your employer or another organization.

Why? Because group life insurance has serious benefits for those who may qualify, and it can be cheap or even free depending on how you receive it. Let’s take a look at what exactly group life insurance entails and if it might be right for you.

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Group life insurance is a term used to describe any life insurance policy that covers an entire group of people. Typically, this type of life insurance is offered as part of an employee’s benefits package or a union organization, so coverage can cost significantly less than the market rate. In some cases, it may even be offered for free, or there may be both free and paid options.

Most importantly, group life insurance policies are offered to a group under one contract, so no medical questions or medical exams are required. The life insurance company assesses the risk based on the whole group rather than the individual, so they don’t need to know your personal medical history.

This means that you may be eligible for group life insurance (if available to you) regardless of your medical history. You can even get group life insurance when you can’t get separate life insurance coverage on your own.

But remember that group life insurance coverage may not be enough to cover all of your life insurance needs. If the group life insurance plan available to you has a lower death benefit than you think you will need, you should consider supplementing it with a separate life insurance plan that you purchase yourself.

Expert advice: You can have more than one life insurance policy at the same time. Many people who get group life insurance as part of their job also buy a separate term life insurance policy.

Another reason to buy your own life insurance policy is that group life insurance is tied to your employer or the organization that provides it. This means that if you quit your job, you will lose your group life insurance coverage with that employer. Your employer may also decide to stop offering group life insurance as a benefit.

Like other types of life insurance, group life insurance can take many different forms. The details of the coverage offered will depend on the life insurance company, the employer or organization’s budget and other factors.

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Most employer-sponsored life insurance coverage comes in the form of term life insurance. This type of life insurance is offered for a predefined term, usually 10 to 30 years, and has a premium amount that never changes. Some employers will provide a basic group life insurance policy free of charge to all of their employees as part of employment benefits.

Group life insurance can be a great benefit to your job, especially if it’s free. However, in most cases, employer-provided policies are relatively small compared to what you’re likely to need in terms of life insurance, so you probably won’t want to rely solely on them to cover you just in case. where the worst would happen.

Often, employees who are part of a group life insurance plan can pay to add additional coverage. This type of additional coverage, known as supplemental group life insurance, allows employees to pay the difference in premiums for a higher death benefit and additional benefits.

Depending on your situation, it may make sense to purchase supplemental group life insurance if the cost is lower than what you would otherwise pay for a similar individual policy. Again, however, your coverage is tied to your employer, so if you quit your job, you will lose your coverage.

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Some employers who offer group life insurance may also extend top-up coverage to spouses and dependents provided the employee pays additional premiums. Often the premiums are reasonable and no medical exam is required for your spouse or dependents.

However, like all group life insurance, this additional coverage is always tied to an employer or organization, so you can lose it if you change jobs or your employer decides to reduce the benefit.

Although not as common, it may be possible to obtain permanent group life insurance as a benefit through an employer or organization. Permanent life insurance is meant to last a lifetime rather than for a fixed term. It can take different forms, such as Group Universal Life (GUL) or Group Variable Universal Life (GVUL).

Like other permanent policies, group life insurance that lasts for a lifetime creates cash value that plan members can count on later in life. However, because it’s permanent, it can also be expensive, so you’ll need to decide if the extra cost is worth it to you.

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Accidental death and dismemberment

Many employers and labor organizations also offer accidental death and dismemberment as part of their group life insurance plan. This type of coverage provides an additional cash benefit if the plan member dies as a result of a covered accident or is disabled during a covered event.

The US Department of Veterans Affairs offers group life insurance coverage for veterans that allows eligible veterans to extend their life insurance benefits after leaving the military by continuing to pay the premiums themselves.

With veterans group life insurance coverage, you must meet specific criteria to qualify, and policies are available for amounts ranging from $10,000 to $400,000.

According to, you can initially sign up for group life insurance for veterans of the amount you had during your military service, but then you can increase your coverage by $25,000 every five years thereafter until until you reach age 60 (and up to the $400,000 coverage limit).

For those who can qualify for group life insurance, purchasing the basic policy offered by your employer almost always makes sense. After all, group life insurance provides financial protection for you and your family, and it can be very cost effective depending on the amount of coverage you receive.

Just make sure you’re not relying on group life insurance as the only coverage to protect your family. While group life insurance can be an important part of your financial planning, you need to make sure you have enough life insurance to replace your income and cover your family’s needs if you die unexpectedly.

Learn more about life insurance and get a free quote with Policygenius.

Not sure if group life insurance is right for you? Read CNN Underscored’s guide to the different types of life insurance.

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