Group Life Insurance
Basic employee benefit under which an employer buys a master policy and issues certificates to employees denoting participation in the plan. Group life is also available through unions and associations. It is usually issued as yearly renewable term insurance, although some plans provide permanent insurance. Employers may pay all the cost or share it with employees. Characteristics include:
- Group Underwriting an entire group of employees is underwritten, unlike individual life insurance where under only the individual is underwritten.
- Guaranteed Issue every employee must be accepted; an employee cannot be denied coverage because of a pre-existing illness, sickness, or injury.
- Conversion at Termination of Employment regardless of whether termination is because of severance, disability, or retirement, the employee has the automatic right to convert to an individual life policy without evidence of insurability or taking a physical examination. Conversion must be within 30 days of termination. The premium upon conversion is based on the employee's age at the time (ATTAINED AGE).
- DISABILITY BENEFIT available in many policies to an employee less than 60 years of age who can no longer work because of the disability. The benefit takes the form of waiver of premium, and the employee is covered for as long as the disability continues. The beneficiary will receive the death benefit even though the employee may not have been in the service of the employer for a long time.
- DEATH BENEFIT Structure or Schedule is usually based on an employee's earnings. The benefit is a multiple of the employee's earnings, normally 1 to 2 1/2 times the employee's yearly earnings.
Popular Insurance Terms
Protection under an insurance policy. In property insurance, coverage lists perils insured against, properties covered, locations covered, individuals insured, and the limits of ...
Monetary sums attached to an insurance company's assets, as listed on the annual statement. ...
Difference between the yield on earning assets and the cost of interest-bearing liabilities. ...
Difference between the actual mortality experience and the expected mortality experience. In statistical terms, this is known as the deviation of the actual (X) from the expected (X). The ...
Coverage that indemnifies a third party lender if a customer refuses to repay a loan made on a faulty product and the dealer who arranged the loan refuses to correct the fault. This ...
One of two basic types of funding instruments for pensions or employee benefits, in which responsibility for plan assets is vested in a trustee. The other type is known as an insured plan, ...
Professional designation awarded by the American College. In addition to professional business experience in financial planning, recipients are required to pass national examinations in ...
Rules that apply to employee distributions (see rollover and withholding rules for qualified plan distributions: payment paid to employee) and that also apply to distributions to surviving ...
Coverage in automobile insurance providing protection in the event of physical damage (other than collision) or theft of the insured car. For example, fire damage to an insured car would be ...
Have a question or comment?
We're here to help.