There are many different life insurance products available on the market today, and one of the most popular is group term life insurance. However, like all insurance products, there are some aspects about group term life insurance that can be confusing, so it is important to know what group term life insurance is in order to understand the benefits it provides you.
What is Group Term Life Insurance?
Group term life insurance is a product that insurance companies sell to groups, usually employers, who then provide it to their employees. The rates that individuals get under these group term life insurance policies are generally cheaper when you compare term life insurance rates. The group policy usually is designed to cover you while you are employed, and frequently can be purchased as an individual policy should you leave your job or whatever group is providing you with insurance. However, it is important to note that the individual policy you receive when you leave your job will likely cost more per month than when it was part of a group policy.
Benefits of Group Term Life Insurance
There are many benefits to group term life insurance. Tax implications are one of the first, as a portion of the policy payments aren’t considered taxable and so are a way to get tax free income from your job. Additionally, they offer all the benefits of other term life insurance policies at a much lower price. This means you can get added protection for your family in case the worst happens during your working years. Moreover, group term life insurance policies are usually of a type called renewable term life insurance, which means you can renew the policy over the years without having to reapply for coverage. As you can see, all of these benefits make group term life insurance an incredibly attractive product to many workers!