An Introduction to Group Life Insurance

Group life insurance, as its name implies, provides insurance for a group—typically, but not necessarily, ten or more employees—under a master contract between the insurer and the employer. Technically, the insured individuals are not part of that contract. Planners should note that almost 40 percent of all life insurance in force in this country is issued on a group basis.

Group insurance is almost always issued as yearly renewable (one-year) term insurance. This means that the coverage expires at the end of each year but is renewed automatically without a medical examination and without further evidence of insurability. The premium rate per $1,000 of protection increases from year to year. Death benefits are paid upon the insured’s death from any cause.

Reproduced with permission.  Copyright The National Underwriter Co. Division of ALM

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