Group Term Life Insurance Benefits and Coverage
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Group Term Life Insurance Benefits and Coverage
While benefits vary from company to company, here are some typical benefits:
Things To Know
- Certain benefits, described here, are typical of group term plans.
- The employer selects the level of benefits.
Accidental death and dismemberment
If you die as a result of an accident or lose a limb in an accident, you or your family is eligible to receive increased benefits. Additional benefits can fall under this category, whereby the insurer may pay an extra benefit if you are the victim of a felonious assault, have to have a limb surgically reattached, or are wearing a seat belt at the time of a fatal accident. Benefits received from the dismemberment benefit vary depending on the severity of the injury and generally range from 12.5 percent of the overall benefit to 50 percent of the benefit for the loss of a limb or the site in one eye.
Accelerated benefits
If you become terminally ill, the policy may pay the benefit during the course of your terminal illness rather than upon your death, providing an additional source of cash to you and your family.
Premium waiver
If you become totally disabled before age 60, your company may continue to pay term life insurance premiums on your behalf until you turn 65.
Continuation of family coverage
Upon your death, your company may pay the term life insurance premiums for your family members for a period of time, such as a year.
Ability to increase coverage
During your employer’s open enrollment period, and at other times of the year, you may be able to purchase additional insurance for yourself, your spouse or domestic partner, or your children at a reasonable cost without providing evidence of insurability.
The employer selects the level of benefits; the more benefits the employer offers through the group life term policy, the more expensive it is for the employer to provide the benefit. Benefits may also be based on your employee status—for example, if the death benefit is based on your salary, the more money you make, the larger the death benefit would be. Coverage typically ends when you leave employment, although some employers do offer the option for you to convert the group life policy to an individual policy at the time you leave your employer.