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| ALL ABOUT GROUP TERM LIFE INSURANCE |
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Group life insurance is term insurance covering a group of people, usually employees of a company or members of a union or association. Individual proof of insurability is not normally a consideration in the underwriting. Rather, the underwriter considers the size and turnover of the group, and the financial strength of the group. Contract provisions will attempt to exclude the possibility of adverse selection. Group life insurance often has a provision that a member exiting the group has the right to buy individual insurance coverage. The cost is lower than for individual policies because there is less administrative work associated with group term insurance.
A group term life policy is usually issued for a period of one year, and renewable each year. The premiums are experienced rated, based on the company's deaths, and range of employees' ages. You may convert your group term life insurance coverage to an individual permanent life insurance policy, which will cost you more money. An employer buys a master policy and issues certificates to employees denoting coverage under the plan. Group life insurance is also available through unions and associations. Employers may pay all of the cost, or share the cost with employees. Regardless of your reason for termination of employment, employees may have the option to convert their coverage to an individual life insurance policy without evidence of insurability or taking a physical examination. |
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