GROUP LIFE INSURANCE
GROUP LIFE INSURANCE
Life Insurance provides a solid financial foundation and serves as a versatile tool for businesses of all sizes. Organizations can use life insurance as a valuable benefit to attract top talent and build loyalty by helping employees protect their loved ones. Business owners can use life insurance for additional purposes including protecting their company, family, partner’s, and key employees from an unexpected death.
TYPICAL GROUP LIFE INSURANCE
The typical group life insurance policy utilizes Term Life Insurance, often renewable each year with a company’s open-enrollment process. This is in contrast to Whole Life Insurance, which provides coverage no matter when you die. Whole life insurance policies are permanent, have higher premiums and death benefits, and constitute the most popular type of life insurance.
With group life insurance, the employer or organization purchasing the policy for its staff or members retains the master contract. Employees who elect coverage through the group policy usually receive a certificate of coverage, which is needed to provide to a subsequent insurance company in the event that an individual leaves the company or organization and terminates their coverage.
EXECUTIVE GROUP LIFE INSURANCE
- An Executive Life plan replaces or supplements group term life insurance benefits for highly compensated employees using individual life insurance policies owned either by the company or the covered employee. Executive life plans are often portable, provide higher coverage levels, and reduce executive taxation. While group plans generally only provide a pre-retirement benefit, most executive life plans also provide some reduced level of post-retirement benefit.
Term Life Insurance, lasts for a set number of years before it expires. If you die before the term is up, a set amount of money, known as the death benefit, is paid to your designated beneficiary. Term life is considered the simplest, most accessible insurance policy. When you make your payments (known as your premium), you are simply paying for the death benefit that goes to your beneficiaries in the event of your death. The death benefit can be paid out as a lump sum, a monthly payment, or an annuity. Most people elect to receive their death benefit as a lump sum.
Whole Life Insurance, is considered a permanent life insurance policy because if does not expire. It has a death benefit but also a cash value, which is a tax-deferred savings account that is included in the policy. The cash value accrues interest at a predetermined fixed rate. Each month, a certain portion of your premium will go into the cash value of the policy, which offers a guaranteed rate of return (The exact amount that goes into savings is determined by your individual policy). The policy's cash value grows over time.
- Due to the fees and the extra feature, a whole life insurance policy can cost five to 15 times as much as a term life policy (for the same death benefit amount).
- Whole life lasts for as long as you pay the premiums. However, the cash value component can make whole life more complex than term life, because you have to consider surrender fees, taxes, and interest as well as other stipulations.
- Still, it may be worth it if you need the cash value to cover things like endowments or estate plans, which might benefit from the greater options that a whole life policy provides.
If you would like more Group Life Insurance coverage information, you have options:
- Call: (800) 624-8976 and an ECIA Group Life Insurance expert is on standby to provide you with the service of excellence.
- or, request more information by completing the Contact Request form and one of our ECIA insurance specialist will contact you the same day, or worse case the following day.