Group Life Insurance: What You Need to Know
Group life insurance is a type of life insurance coverage offered by an employer or organization to its employees or members. It’s commonly provided as part of an employee benefits package and offers a basic level of financial protection at little or no cost to the employee. Mark E. Snapp & Associates provides group life insurance in Palm Beach, FL, Vero Beach, FL, Fort Pierce, FL, Millersburg, OH, West Virginia, Morgantown and surrounding areas.
- Basic Coverage:
Most group life insurance policies provide term coverage, meaning it lasts as long as you’re employed with the organization. The death benefit is often a flat amount (e.g., $50,000) or a multiple of your annual salary.
- Employer-Paid Premiums:
Employers typically cover the cost of basic group life insurance. Some plans allow employees to purchase supplemental coverage at group rates, which are generally more affordable than individual policies.
- No Medical Exam:
Group life insurance usually doesn’t require a medical exam, making it accessible to people who might have difficulty qualifying for individual policies due to health conditions.
- Portability:
Coverage usually ends when you leave the company. Some plans offer a conversion option to individual life insurance, but this can be more expensive, especially as you age.
- Limited Customization:
Group policies are standardized, meaning you can’t customize them to the same extent as individual life insurance. Coverage limits may be lower than what you need for full financial protection.
- Supplemental Coverage:
Many employees choose to buy supplemental life insurance—either through their employer’s plan or separately—to ensure their family is fully covered in case of an untimely death.
- Tax Considerations:
Premiums for coverage up to $50,000 are typically not considered taxable income. However, the cost of coverage above that amount may be taxable to the employee.
Should you have any questions, feel free to give us a call.