WEDNESDAY, MARCH 18, 2020
 Group life insurance is most commonly purchased by employers to offer as part of their benefits package for their employees. Practically everyone needs life insurance, and it can often be more affordable to sign up for a policy through an employer rather than buying a separate policy.
Benefits of Group Life Insurance
Group life insurance is unique in that it guarantees coverage. If your employer offers group life insurance, the chances are that you will qualify for coverage even if you wouldn’t qualify for a life insurance policy on your own. Reasons you wouldn’t qualify for your own policy include a bad credit score or certain pre-existing conditions.
It can also be more affordable, or even free.
Downsides of Group Life Insurance
Of course, it can’t all be perfect. Although group life insurance is cheap or free and allows employees to qualify, coverage under group life insurance is limited. The death benefits are typically only one or two times your annual income. This is a lot less than you could have under a personal life insurance policy. Employers often purchase term life insurance, which lasts only as long as you are employed at the company. If you leave or are let go, you could be left without coverage.
Even if you sign up for life insurance through your employer, it’s recommended that you carry a personal life insurance policy. Group life insurance can help with extra coverage, but it should not substitute your life insurance policy.
How Does a Group Life Insurance Claim Work?
Like any other life insurance policy, benefits are paid once the insured (in this case, the employee) passes away. Rules and limits vary depending on the employer’s policy. The time of death, such as how long the employee has been working for the employer, can have an affect on the death benefits paid to the employee’s family. The employee’s family may need a certified death certificate for certain claims, especially if they’re over a certain amount (such as $500,000).
When the employee passes away, the remaining family should file a life insurance claim both with the late employee’s personal life insurance provider and their employer’s life insurance. Depending on the policy’s limits, death benefits will then be paid out to the family. These benefits can help pay for things such as funeral services, caskets, cremation, burial services and more.
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