What is group term life insurance?

Group term life insurance is usually the kind of life insurance your employer offers. However, group term life insurance doesnt have to be obtained from your employer; some people choose to by this kind of life insurance themselves if they are members of groups such as trade associations, unions, and associations for college alumni that offer term life insurance policies at group rates.

Why is a group term life insurance policy better than an individual policy?

We wont say that its better, but it does have certain perks that an individual policy doesnt have. For example, most group term life insurance policies dont require medical standards, i.e., you wont have to meet certain health criteria in order to be eligible for the group term life insurance policy.

If there a lot of people under the policy, or several people who are younger than you, there may be averaging and subsidizing that would make for lower death benefits rates.

Also, paying for your group term life insurance policy is easier than paying for any other kind of life insurance policy. Why? If you purchase through your employer, the costs will be taken out of your paycheck. If you purchase from a group with which you are affiliated, you can probably schedule credit card payments.

What other advantages does a group term life insurance policy offer?

If you ever leave the job or group that offers your group term life insurance policy, your state may allow you to transfer your group term life insurance policy into a whole life insurance policy. This means you wont lose your life insurance, and you can stay with the same insurance company that provided the group term life insurance policy. Even better news you wont have to undergo a medical exam! This is an advantage for those who are getting on in years, and may have less than great health.