Group life insurance is a great benefit that many employers offer along with health and retirement plans.
What is group life insurance?
Group life insurance is usually offered by employers as a part of a benefits package. Coverage tends to be inexpensive or free. However, most plans only cover one to two times your salary, which is less than what most people need.
You can often customize your group life insurance to meet your unique situation by buying additional coverage for yourself or even your spouse.
Guaranteed coverage
You usually don't need a health screening, and you can get group life insurance coverage regardless of your health or pre-existing conditions.
No medical exams
In most cases, you won't need a medical exam or have to answer any medical questions to qualify for group life insurance coverage through your employer.
Questions about group life insurance? We've got answers.
Group life insurance is typically a form of term life insurance. If you die while a term policy is in place, your beneficiary receives the death benefit. In many cases, you're automatically covered. However, if you leave your job, you could lose your group life insurance coverage.
It depends on your employer's plan.
Many employers offer a base amount of group life insurance at no cost to you. But some employers might pay only a portion of the premiums or none at all. In these cases, you would need to pitch in to pay for coverage, usually through a payroll deduction. The good news is that group plans tend to be affordable options.
If you're a business owner looking to add group life insurance as a benefit for your employees, Northwestern Mutual has options that can cover small and large groups. We can also help employers who wish to add additional insurance options—such as accidental death and dismemberment (AD&D) insurance and contributory life insurance, which is sometimes called voluntary life insurance.
Group life insurance is often a form of term life insurance. Your employer might offer group life insurance, but if you leave your job, your coverage will end. An individual term life insurance policy is not tied to your employer. For that reason, many people choose to supplement group life insurance through work with an individual policy.
Yes. You can take advantage of the group coverage offered by your employer even if you already have your own individual life insurance policy. In fact, this can be a great way to boost your death benefit while you're employed.
If your employer offers other forms of supplemental insurance, like accidental death and dismemberment insurance, you can also opt into those while maintaining your individual policy.
Group life insurance is a great perk, but that doesn't mean it will meet all of your coverage needs.
That's because group coverage typically covers only about one or two years' worth of your salary, which is less than what most people need. That's why people often get additional individual life insurance to make sure they get the right amount of coverage. Also, while group life insurance coverage through your employer could end if you leave your job, individual coverage is yours no matter where you work.
Because life insurance is considered a personal expense by the IRS, any premiums that you pay usually are not tax deductible. Also, you won't be able to deduct premiums paid by your employer.
Generally speaking, once you no longer work for the employer sponsoring your group life insurance policy, your coverage ends. This applies whether you quit, retire, or are fired or laid off. However, in some cases you could have the opportunity to keep the coverage by paying the premiums yourself.
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