What is group term life insurance mean

What Is Group Term Life Insurance? Group term life insurance is a type of term insurance in which one contract is issued to cover multiple people. The most common group is a company where the contract is issued to the employer who then offers coverage as a benefit to employees.

What is a group term life insurance?

Group term life insurance is term life insurance offered to all members of a certain group, such as all the employees at a company. The insurance is provided at a group rate, which is typically cheaper than purchasing the same coverage individually.

What is difference between term insurance and group term insurance?

The coverage available under group life insurance is limited to the terms and conditions set by the employer. Thus, you cannot choose the term insurance coverage for your policy. The coverage for individual term insurance has no cap as such and you can pick a suitable sum assured for your policy.

What are the disadvantages of group term life insurance?

The employee has little to no control over their individual coverage. Coverage does not continue or follow the employee if you leave your job. Healthier individuals pay the same premiums as those who are considered to be a higher risk within the group policy.

Can you withdraw from a group term life insurance?

Term life is designed to cover you for a specified period (say 10, 15 or 20 years) and then end. Because the number of years it covers are limited, it generally costs less than whole life policies. But term life policies typically don't build cash value. So, you can't cash out term life insurance.