What is Group Life Coverage?

Life insurance is one of the main ways people continue to provide for their families if they pass away unexpectedly. For New Jersey residents whose wages account for a significant portion of their family’s income, life insurance is especially important. Businesses in the state can help their employees get coverage by including group life insurance among the benefits offered to employees.

Group life insurance is a form of life insurance that insures a defined group of people. Unlike personal life insurance policies, group policies provide coverage for multiple people -- and the policies’ premiums are typically spread evenly across all policyholders.

Who Pays for Group Life Insurance?

Group life insurance policies are often made available by businesses, nonprofits, governments, and membership organizations to their employees or members. In some cases, the business or entity pays the policy’s premiums. In other cases, employees pay the premiums, or at least a portion of them.

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How Much Coverage Do Group Life Policies Offer?

Group life policies can be set up to offer almost any amount of protection. Policies may provide only basic coverage -- as little as $1,000 in some cases -- or they can provide coverage that’s several times employees’ annual salaries.

Are There Different Kinds of Group Life Policies?

A few insurers may offer whole or universal group life policies, but the vast majority of group life policies provide term coverage. Term coverage normally provides a set amount of protection and have fixed premiums, and the coverage is effective for a defined period of time. In group life policies, the defined period of time is usually while an individual is an employee or member. Once a person ceases being an employee or member, their coverage is typically terminated.

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Are Employees or Members Automatically Enrolled in Group Life Policies?

Whether employees or members are automatically enrolled in a group life policy typically depends on how the policy is set up. If all of the policy’s premiums are paid by a business or other entity, employees or members may automatically be enrolled in the policy because enrollment doesn’t cost them anything. If employees or members are required to pay at least some of the policy’s premiums, they typically are given the option to sign up for or forgo coverage.

When employees or members are automatically signed up for a group life policy, the details of the policy and benefits that it provides should still be explained to everyone who is enrolled. Employees and members should understand the benefits they’re entitled to and what causes of death are covered, and they also should be given the opportunity to name beneficiaries.

What New Jersey Businesses and Organizations Usually Offer Group Life Coverage?

Many businesses, nonprofits, governments, and membership associations in New Jersey offer some form of group life coverage. Businesses and organizations from across NJ often find that it’s an easy way to enhance employees or members’ benefits. Additionally, because the amount of coverage can vary, businesses and organizations are often able to find a policy that fits within their budget.

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How Can Businesses and Organizations in New Jersey Set Up a Group Life Policy?

Group life insurance is often included as part of a company’s or other entities’ group benefits package. New Jersey businesses and other organizations that would like to add group life coverage to the benefits that they offer their employees or members can compare available policies by talking with an advisor that specializes benefits packages. A specialized advisor will be able to help a business or organization look at different coverage options, select a policy, and set the policy up.

 

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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