What is group life insurance?
Group life insurance is a legal contract between a group of policyholders (often employees in a company) and the insurance company. How group insurance works is that the employer usually pays the premium and agrees on the level of cover.
More about group life insurance:
In most cases the insurer will offer cover without the need for each individual to complete a health questionnaire.
The policy will have an end date. When the employee leaves the company they will no longer be covered.
By getting group life insurance coverage in bulk, the coverage costs for each individual worker or member are much less than if they had to purchase an individual policy.
Those who are covered typically receive a certificate of insurance that serves as proof of insurance but is not actually the insurance policy.
To decide what type of life insurance you should purchase, you need to consider the risks that you are exposed to. These risks may include:
- The risk of dying
- The risk of losing your income
- The risk of contracting a dread disease
Before buying life insurance, make sure that you completely understand the policy. You need to understand your needs. The level of cover that you get should ideally be enough to provide financial support for your family in the event of your death or of you being unable to provide for them.
With group life insurance however, the amount of cover that you get is not an individualised form because there are numerous members who are covered. The amount of cover will also be affected by the health of the individuals on the policy, so you can’t really control this aspect. Having this cover however, is beneficial over and above your individual life insurance policy.