What is group life insurance?

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Employer-provided (Group) life insurance is usually offered as part of a benefits package. Normally, the life insurance offered is Term. If the employer pays for it, it’s usually at a rate between 1 to 2 times your salary (or total pay, if you earn a salary and commission/incentives).

Many employers offer the option to purchase additional life insurance. The additional purchase is typically limited to no more than 4 to 5 times your salary or total pay, and usually has a benefit cap (i.e. $550,000). It’s also guaranteed issue when first offered to new employees, or to all employees if it’s a never-before offered benefit. If you don’t take it when first offered, you’ll have to wait until the next Open Enrollment, and then complete an Evidence of Insurability form (health history questionnaire) and could be declined.

While the rates are usually less than buying a policy direct through a broker (like PolicyGenius), the policy and that low rate end when your employment ends. You have the option to convert it to an individual policy, but the rates end up much higher than buying an individually-underwritten life insurance policy.