Group Life Insurance Plans in New York
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What is Group Life Insurance?
Group life insurance is a type of life insurance in which a single contract
covers an entire group of people. Typically, the policy owner is an employer or
an entity such as a labor organization, and the policy covers the employees or
members of the group. Group life insurance is often provided as part of a
complete employee benefit package. In most cases, the cost of group coverage is
far less than what the employees or members would pay for a similar amount of
individual protection. So if you are offered group life insurance through your
employer or another group, you should usually take it, especially if you have no
other life insurance or if your personal coverage is inadequate.
As the policy owner, the employer or other entity keeps the actual insurance
policy, known as the master contract. All of those who are covered typically
receive a certificate of insurance that serves as proof of insurance but is not
actually the insurance policy. As with other types of life insurance, group life
insurance allows you to choose your beneficiary.
Term insurance is the most common form of group life insurance. Group term
life is typically provided in the form of yearly renewable term insurance. When
group term insurance is provided through your employer, the employer will pay
for most (and in some cases all) of the premiums. The amount of your coverage is
typically equal to one or two times your annual salary.
Group term coverage remains in force until your employment is terminated or
until the specific term of coverage ends. You may have the option of converting
your group coverage to an individual policy if you leave your employer. However,
most people choose not to do this because these conversion premiums tend to be
much higher than premiums for comparable policies available to individuals.
Typically, only those who are otherwise uninsurable take advantage of this
conversion option.
This material was written and prepared by Emerald Publications. © 2007 Emerald Publications
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