Why Use Group Term Life Insurance?
Group term life insurance is a type of term life insurance that provides coverage for employees working for the same employer. The policy consists of a large policy with each employee subscribing to the plan. This type of plan is common among employers that offer benefits to employees.
Other People Are Reading
-
Tax Deduction
-
When paying for group term life insurance, the Internal Revenue Service allows you to pay for premiums on a pretax basis. This means you may purchase more life insurance than you otherwise would be able to or simply pay less for your premiums than you otherwise would since the premiums are not taxed. This tax deduction is limited to premiums used to support $50,000 of death benefit.
No Health Exam
-
You don't need a health exam. You may purchase group term life insurance without filling out a lengthy application. There is no health underwriting. Normally, your acceptance is guaranteed in this respect. The risk is spread out among all of the workers in the group. This allows you to purchase life insurance when you may otherwise not be able to.
-
Lower Premiums
-
Premiums are normally lower for group term life insurance than for individual policies. This, again, has to do with the fact that you are not rated based on your health status. Because of the lower premiums, and combined with the pretax premium payments, the lower premiums mean you'll pay less with your employer than on your own with a private policy.
Convertibility
-
When you leave your employer, you may be able to take the policy with you. If your employer offers a convertibility option, you'll be allowed to take your life insurance policy and convert it to a private policy. In some cases, you'll be required to pay premiums after conversion. In other cases, you'll be able to convert to a fully paid-up policy.
-
