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What Is Group Term Life Insurance

Many workplaces offer group life insurance plans, so it makes sense to research the pros and cons of getting group life insurance through your employer. If you have been intending to buy life insurance but have not gotten around to it yet, you should check with your place of work and see what they offer. It is also smart to look into all of the insurance offerings your employer provides when you get a new job, and during open enrollment insurance. It may be possible to get a life insurance policy through your workplace for little or no money at all!

A large number of employers provide free life insurance as a benefit of employment with their company. The life insurance policies that employers offer are known as group life insurance. It is very simple and convenient to obtain if your employer provides it, you only need to sign up. Sometimes, enrollment in a company's life insurance plan is automatic.

There are plenty of people who opt to buy additional insurance, which is known as supplemental life insurance, through their group life insurance at their workplace. Up to 50% of all life insurance policies in 2015 were provided through groups. Group life insurance can be provided by workplaces, churches, various associations, and other groups. If you are wondering whether or not buying group life insurance through your employer is a good plan, reading through these pros and cons will be very helpful:


  • Employers often provide a small amount of life insurance coverage free of charge. While this is definitely a benefit and has its pros as well, it is generally in the category of basic life insurance coverage. Coverage amounts typically range from $25,000-$50,000 or an employee's annual salary. This coverage is free in many cases and is usually guaranteed. Due to it being free, there is often no reason to turn down the coverage.
  • That said, this insurance is often not enough by itself so purchasing additional supplemental life insurance can be a good decision. For life insurance coverage, you will need to fill out forms and submit them by a provided deadline. When you file your paperwork, you will need to name a beneficiary or multiple beneficiaries. If you decline to name any beneficiaries, the benefits from your policy will go to your spouse or other relatives as determined by the law.
  • Often, people whose employers provide basic group life insurance will purchase supplemental life insurance along with it. Supplemental life insurance provides people with the opportunity to buy additional coverage, which can be a big help for loved ones. Sometimes, workers can purchase a policy valued at up to four or five times their annual salary. The higher the amount of the insurance policy, the higher the likelihood you will need to fill out additional paperwork, such as a health questionnaire. People with the history of disease or other medical issues may need to let the insurance provider review their medical records. A physical exam and medical testing may also be asked for.

Advantages Of Group Life Insurance

A few of the main reasons that buying group life insurance through your workplace is a good idea are:


Many employers offer group life insurance rates that are a fantastic deal. Even shopping around, many people find that they simply cannot beat the group rates that their employer offers.

Likelihood Of Acceptance

Along with cost, which is often much better even for people with serious medical conditions, the likelihood of acceptance is higher with group life insurance plans. Most often, there is no medical exam needed, though some insurance companies ask people to fill out some forms and questionnaires in detail.

General Ease

Life insurance is something that many people know that they need, but have not purchased a plan yet. Getting your coverage through the workplace can be the easiest and most convenient way to provide financial security and protection to your family. During open enrollment, employers often offer the forms and information that you need about your life insurance possibilities. Just fill out the forms, select whether you want supplemental life insurance, and turn them in by the deadline. Voilà, you are covered.

Disadvantages Of Group Life Insurance

Of course, there are some disadvantages to having a group life insurance plan provided through your employer.


Let 's face it; people tend to change jobs over the course of their career. It seems to be even more of a commonplace as time goes by. This can have a negative effect on that fantastic rate you received on your workplace group life insurance policy. If you change jobs, you could lose your group insurance status and have it rolled over into an individual life insurance policy. The biggest negative that this presents is the change in the cost of your plan. When that policy rolls over, the cost of your premium could go up drastically. Some plans do allow you to remain on the plan after separating from your employer.

If not, note that the cost of insurance goes up as you age, with each new term. If the next job you get does not offer group life insurance, you could find yourself either without life insurance or paying a much higher rate than you would like. If at some point you develop a condition that could impact your prices a lot, causing them to rise, there is a chance you won't be able to get coverage.


The variety that you will find offered through workplace insurance is often a lot less then you would be able to find elsewhere. Generally speaking, term life insurance, which is usually what workplaces offer, is the best option for most people. For people looking for other types of life insurance such as whole life or universal life, contacting a financial advisor to get direction is generally the best idea.


Lastly, there is a chance that you will not be able to get the amount of coverage you desire through your workplace. If this is the case, you might look to buy regular term life insurance rather than getting a policy through your employer. Another option would be getting a regular term life insurance policy in addition to the supplemental group life insurance plan that you purchase at your work.

What To Do Next

The next step is to figure out exactly what you are going to do. If your employer offers free basic group life insurance, make sure to take advantage of it. It is free insurance provided by your workplace, and it could benefit your loved ones if you pass away.

After that, look into the cost of supplemental life insurance available through your workplace. Compare the cost of this insurance to other insurance policies that you come across in your own research. You can use this site to help compare rates while you are shopping around. If you can get a comparable deal on your own, it is often recommended to do that. Even with an individual policy with slightly higher premiums, not having to worry about whether you will lose your policy or have to pay drastically increased rates can be worth the additional cost.

Finally, determine how much life insurance makes sense for you to have. If there are many dependents in your life that you would want to list as beneficiaries, it may make sense to buy an individual policy. It may also make sense to supplement that individual policy with a life insurance plan through your workplace.

Another thing to consider is whether or not you will qualify for a good rate as an individual. If you have a medical condition or are at high risk for a medical condition in your near future, insurance through your employer may be the way to go.

If you do not expect to stay with an employer for an extended period, getting anything more than a free basic group life insurance policy may not make sense.

Final notes

The last step after deciding which type of insurance is best for you is getting a policy in making sure you have taken care of all of the details. If there is a deadline for getting a life insurance policy at your workplace, and that is the option you choose, make sure to get all of your forms and before the deadline. If you decide to get an individual life insurance policy that is not affiliated with your workplace, make sure to do it. These policies provide an immense amount of financial security to your loved ones, and that is extremely important.

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