What does Group Term Life insurance provide?
Group Term Life insurance is a foundation of insurance protection for
employees and their families. It provides protection for a specific
period of time and pays a benefit only if the insured dies during the term.
There is no cash value buildup in a term life insurance policy.
Group Term Life insurance provides a base level of protection that can
be enhanced by personal savings, individual life insurance and Social Security
benefits. The death benefit is paid income tax free to the beneficiary.
It provides survivors with an "emergency fund," allowing them to use individual
life insurance and other funds for longer-term needs.
Types:
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Basic Group Term Life coverage provides a basic level of life insurance,
often paid for by the employer. Premiums for up to $ 50,000 of coverage
paid by the employer are considered an income tax-free benefit to the employee.
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Supplemental Group Term Life coverage is voluntary coverage paid for by
the employee, allowing the employee to choose the amount of insurance that
fits his or her personal and financial situation. Employers often
offer this insurance in conjunction with an employer-paid Basic Term Life
plan.
Portable Term Life insurance provides supplemental coverage to employees
and dependents who lose eligibility under the group policy. Employees
can take this protection with them if they leave the group or retire and
continue coverage until age 70 (under most plans) by making payments directly
to the insurer.