Group Life Insurance

Group life insurance

� provides coverage for many lives using one contract. Less expensive then a regular policy

Types of groups

o Single employer sponsored
o Multiple employer trust (MET)
� Trust formed by group of small employers in same or similar industries
o Labor union
� Taft Hartley trust
o Professional or trade association
o Group credit life
� Lender automatically the bene

Master policy

policyholder or applicant

Certificate of insurance

evidence of coverage

� Contributory

o Employee pays part or all of the premium
o 75% of eligible employees must enroll


o Premium paid by employer
o 100% of eligible employees must enroll

Group underwriting

o Underwriter underwrites the group not individual insureds
o Usually no medical questions or exams

� Eligibility requirements: employer determines class

o Full time vs part time
o Years of service

Probationary period

waiting period before eligibility for insurance

Enrollment period

o Follows probationary period - usually 31 days
o No medical questions

� Late enrollment

o If allowed - may require underwriting

� Dependent coverage

o Typically less coverage then the employee

� Conversion

o Termination of employment
o Employer stops plan
o 31 days
� Convert to individual permanent policy
� Cost based upon attained (current) age
� No medical questions
� Death during conversion covered

� Credit life
o Group

� Sponsored by lender
� Lender is beneficiary
� Usually no medical questions
� Cheaper than individual policy
� Insurance no greater than debt owned
� Stops if debt is paid

� Credit life

� Insured is usually policyowner
� Assigned to lender
� Death benefit can exceed the debt
� Doesn't stop when debt is paid
� Can be more expensive than group
� Usually require medical questions