Posts tagged ‘employee life insurance’

How to Get Term Life Insurance for Employees

Term life insurance is a product that many employers provide to employees as a company benefit. There are differences between group term life insurance and individual coverage. The qualifications are also different for group life as well as the payout for a death benefit and the coverage. In addition, the terms are usually fairly low and the renewal process may be different from individual life insurance too.

Group Term Life Insurance

Group term life insurance is term life coverage provided by an employer to cover every single employee the same way. There are rules that stipulate that if an employer provides this type of benefit then it must be provided equally to all employees. Most group policy quotes begin with a group census form, filled out most often by someone in human resources. The group census form gathers all of the necessary information for all employees. Group life insurance is often a company perk that is either paid for in full by the employer or costs an employee only a small premium.

Qualifications for Group Term Life Insurance

The qualifications for group term life insurance are much different from the qualifications for individual coverage. Employees who sign up for the group life insurance policy do not have to prove insurability, they automatically qualify. Basically, group insurance cannot discriminate between employees. Insurance companies pool the company employee information and determine rates for various accordingly, typically based on company turn over and location. The risk is balanced by the diversity.

Payout and Coverage Amount

The coverage amount and payout for a death benefit from a term life insurance policy provided to employees from an employer may not be very large. In most cases, group life insurance is not enough coverage alone in the event that the bread-winner was to pass away. The amount of coverage may only be enough to cover an average salary for 1 to 2 years. Employees should make sure they know the terms and death benefit amount and buy additional, individual coverage if needed.

Renewal Information for Group Term Life Insurance

Renewing a group life insurance may not even require the assistance of the employee. In most cases group life insurance policies are set for a short period of time, around one year. If the policy is paid for in full by the employer, the human resources department usually takes care of the renewal each year and the employee does not have to be involved. In the event that the employer pays for the product, they are likely given the chance to opt out at renewal and may be more involved with the group life renewal process.

Obtaining group life insurance coverage is much like getting any other life insurance product, only for several people at one time. There are some differences in the qualifications between group and individual life insurance, considering that a group term policy is approved for everyone within the group. In addition, the coverage amounts are not usually very high and renewal is usually taken of care of by the company.