What is Group Life Insurance?

Life insurance is an important insurance coverage that can help people prepare for the ultimate unexpected event. Many people purchase individual life insurance policies on their own to ensure that their families will be cared for even if they pass away. This isn’t the only way that people can obtain life coverage, though. Businesses can offer their employees life coverage through group life insurance policies.

Group life insurance is a type of life insurance that extends benefits to a defined group of people, such as a business’ employees. Everyone who participates in the policy generally receives coverage, and the policy’s premiums are usually split evenly by all participants. Thus, people normally pay the same amount for the coverage regardless of their risk level.

Who Pays for Group Life Policies?

When a business makes a group life policy available to employees, the associated premiums may be paid by the business or its employees. Sometimes, the premium payments are split between the business and employees, with each paying a portion.

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Businesses that pay all of a group life policy’s premiums might automatically enroll employees in the policy. Enrolling doesn’t cost employees anything in these situations, and they gain some life insurance coverage.

If any portion of a group life policy’s premiums is paid for by employees, employees normally aren’t automatically enrolled in the policy. In these situations, employees are usually given the option to sign up for coverage if they want to pay the associated premium.

How Much Coverage Do Group Life Policies Afford?

The amount of coverage provided by group life policies can vary a lot. Some businesses procure policies that offer just a small amount of coverage -- sometimes as little as $1,000. Other businesses get policies with coverage that’s several times greater than employees’ yearly salaries.

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What Businesses and Organizations Get Group Life Policies?

Because group life coverage is usually highly affordable and a benefit that almost everyone appreciates, many businesses, nonprofits, and membership associations sign up for group life policies. Providing group life coverage is an affordable and easy way to add to the benefits that employees or members receive from a business or organization.

Are Different Types of Group Life Coverage Available?

A few insurance providers might have universal or whole group life policies available. The majority of group life policies are term policies, though. Term policies typically have set premiums and offer coverage for a defined amount of time, which is often until an employee leaves a business (or member leaves an association).

Do Group Life Policies Cover Employees During Sabbaticals?

Many group life policies are able to extend coverage through sabbaticals or leaves of absence. Business owners or human resources representatives should review their business’ particular policy before an employee takes a sabbatical or leave of absence, however, to make sure the employee will continue to have group life coverage.

Do Group Life Policies Cover Spouses and Children?

Some group life policies offer coverage for spouses and children as an option, but other policies don’t have this option. When this option is provided, selecting the additional coverage usually increases the premiums for an employee slightly.

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How Can Businesses Get Group Life Insurance?

Businesses and other organizations that want to offer group life insurance to employees or members should contact an independent insurance agent who’s familiar with this form of insurance. An independent agent will be able to help a business or organization decide what level of group life coverage to offer, and an agent can help request quotes for policies that offer the desired amount of coverage.


Meet Your Industry Specialist

Terence J. Gorman

During his 25+ years of experience in the insurance industry, Mr. Gorman has made it his mission to provide his clients with service levels that exceed all expectations. Client satisfaction has always been the foremost goal.

Prior to joining World Insurance, Terence worked with large market groups, 5,000+ employees, designing, underwriting and implementing their employee benefits programs. Throughout his career, he has helped multiple organizations and their employees save hundreds of millions of dollars, while improving plan efficiencies and increasing employee satisfaction.

"My team's success historically comes from organic growth and retention. We pride ourselves on service and measure success by the referrals our clients happily provide."

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