Group Permanent Life Insurance

Coverage following the same structure as group term, the significant difference being that premiums go toward the purchase of permanent insurance instead of term insurance. The employee has a vested interest in the increments of paid-up insurance purchased. Because of the tax consequences to the employee, group permanent insurance usually is applied to fund retirement plans such as pensions instead of providing life insurance coverage. If the employer purchased permanent insurance on the employee's behalf, the contributions would become taxable income to the employee on a current basis. Group life insurance is experience rated, in that the loss experience of the entire group determines the premium rate applied to each employee.