A common assumption about life insurance is it must be obtained by the person who wishes have such coverage. In other words, the person buys directly from the insurance company and no third parties are involved. While it is true significant volumes of people do procure insurance this way, an alternative exists in the form of group life insurance. This category of insurance is employer or entity provided. Entity can be defined as a certain professional association, labor union, or other organization which offers life insurance to its members. The terms of how the insurance is acquired may vary from entity to entity, but it is always the employer or association management that makes the group life insurance package available.
Usually, group life insurance is going to be offered as part of an overall benefits package. As with traditional health insurance, access to life insurance helps attract and retain quality employees. The competition for quality professionals is always going to be fierce in any industry. Perks such as life insurance can help a business stand out and become more attractive. The same can be said about any entity that is looking to build up its membership rolls. If somebody has a difficult time obtaining life insurance, group coverage can be helpful if minimal or no underwriting is required.
For the employee or member, group life insurance presents a very cost-effective means of acquiring a much needed policy. Settlements from a policy may deliver a means of financially caring for family and loved ones in the event of an unfortunate passing. Group life insurance is often a cheaper alternative since it is acquired by the providing entity at wholesale prices. In some package deals, the employer/member does not have to pay any out of pocket expenses.
The low costs and high benefits definitely contribute to this type of insurance being as popular as it is. Special plans can also be created for key management on top of existing group coverage. For more information, contact us.
Randy Peck, CEO