Group Term Insurance
Group life insurance is term insurance covering a group of people, usually employees of a company or members of a union or association. Individual proof of insurability is not normally a consideration in the underwriting. Rather, the underwriter considers the size, turnover and financial strength of the group. Contract provisions will attempt to exclude the possibility of adverse selection.
Group life insurance often includes a provision for a member exiting the group
to buy individual coverage.
With group term life, policyholders do not have to pass a medical exam to qualify for coverage, and the premiums of a group term life insurance benefit package tend to be lower than those of individual policies. Read on for additional information on group term life coverage. for an individual quote or more information on individual
Employers purchased group term life insurance is designed to cover all interested employees, when purchased in a group those with a health risk are guaranteed coverage when individually they may have been declined. When the unhealthy are included on a group plan with the healthy this allows for the risk to be reduced through underwriting. As a result, group term life insurance benefit packages
are typically much cheaper than individual policies. For example, the costs of insuring a 65-year-old with employer-sponsored group term insurance will be balanced out by another employee who is 25 and healthy. In essence, the younger, healthier employees subsidize the cost of term life group insurance for the older, sicklier employees. At times it is more practical for the healthy to get an individual
Most employers and organizations simply require their employees or members to complete one form to opt in to the group life insurance program. There are no lengthy applications or involved processes. One of the most appealing perks of group term life insurance benefits packages is that no medical exam or medical history is required.
Individual term life policies require the applicant to pass an involved medical exam, but group coverage usually comes with guaranteed acceptance with no exam requirement.
Relief for high-risk groups. Those who have trouble finding coverage on the individual market because of certain personal risk factors can almost always find coverage through group term life insurance. Employers tend to offer term life as a standard component of benefit packages, and even some organizations and clubs offer discounted group term life as well. Group Life Quote
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