Group life insurance is one of the most common fringe benefits provided in America. This is due in part to its affordability. It is usually provided by employers or labor organizations to workers. The cost is so low that sometimes workers receive this for free. But what is it exactly and do you or your workers need it?
The Basics of Group Life Insurance
Group life insurance is a lot like purchasing insurance for workers wholesale. You have one contract with the insurance provider and this extends to multiple people in your company or organization. This allows you to provide insurance for everyone, and even yourself, for a much lower cost than if each person purchased a life insurance policy on their own.
While the basic coverage may be free to employees, or provided at a reduced employee cost with the difference being paid by the employer, some people may choose additional coverage. This upgrade increases the premium for that individual. You may pay for this on behalf of your worker as a benefit, but it is also fairly normal to deduct the cost of the additional premium from the worker’s paycheck. As with any other insurance policy, workers select their beneficiaries. These people receive the payout in the event of the employee’s death.