Group-Term-Life Insurance: Benefits, Coverage & Employer Guide
What Is Group-Term-Life Insurance?
Group-term-life insurance is a type of life insurance policy that provides term life coverage to a group of people under a single master policy. The group is usually made up of employees working for the same organization. Instead of buying individual life insurance policies, members receive coverage collectively through their employer.
Group-term-life insurance is commonly offered as part of an employee benefits package. It ensures that if an insured employee passes away during the policy term, a lump-sum death benefit is paid to their nominated beneficiary.
Simple Meaning of Group-Term-Life
In simple words, group-term-life means one term life insurance policy that covers many employees at once.
How Group-Term-Life Insurance Works
The employer purchases the group-term-life policy from an insurance provider. Eligible employees are enrolled, usually without medical tests. The employer may pay the full premium or share the cost with employees. If an employee dies during the coverage period, the insurer pays the sum assured to the beneficiary.