Group Life Insurance

Group life insurance

plan that provides coverage to more than one person under one policy; usually written for employee-employer groups, and often annually renewable term; evidence of insurability not necessary if participant enrolls during open enrollment period; participant

Distinctions between individual and group

evidence of insurability is usually not required, participants under plan don't receive policy because they don't own/control the policy

Noncontributory plan

employer or group sponsor pays all the premiums; insurer will require that 100% of the eligible employees be included in the plan

Contributory plan

when premiums are shared between employer and employees; insurer will require that 75% of eligible employees be included in the plan

Group life policy provisions

many are same as individual, except misstatement of age provision; if insured misstated his or her age, insurer will adjust premium and/or benefit to correct age (in individual only benefit is adjusted)

Dependent coverage

participants in group insurance are usually allowed to cover dependents on their policies, usually applies to insured's spouse and children

Master policy holder

selects type of coverage, which may either be permanent or term; in FL, must contain conversion provision; employee usually has period of 31 days after terminating from the group in order to exercise the conversion option; if policy owner dies during conv

When group life is NOT APPLICABLE

individuals related by blood, marriage, or legal adoption, who have insurable interest in each other's lives; individuals who have a common interest through ownership of a business enterprise, or substantial legal interest or equity, and who are actively

Eligible groups

employers, labor unions, credit union group, an association, and any other organization formed for a reason other than purchasing insurance

Minimum number of insureds required for group life insurance policy in FL

1

Taxation of group life plans

in group term, the premiums that are attributable up to the first $50k of life insurance are not taxable to employee; when business is named beneficiary of life policy for key employee, stock redemption, split dollar insurance, the premiums are NOT tax de

Franchise life insurance (wholesale insurance)

individual policies written on employees or members of a common employer or association who serves as the sponsor of the plan; insured may continue the coverage so long as they maintain a valid relationship with the sponsor and so long as the premiums are

Group credit life

decreasing-term insurance issued to creditors to cover the lives of debtors in the amounts of their respective loans

Blanket life insurance

covers a group of people exposed to a common hazard (passengers of an airline, students of a school, etc.); insureds are not specifically named on policy or furnished with certificates of insurance, but are covered only for the specific hazard stated in t