Group Term Life Insurance

Any kind of individual life insurance policy is based on the risk that one person presents to an insurance company. If an individual's risk to an insurance company is too high, the company will not insure that individual. In many cases, an individual's risk is low enough to be insured, but high enough that it causes that person's premium to be significantly higher than the average policy. What makes group insurance different is that the policy's premium is not based on the risk presented by a single person. Instead, the assessment of risk is averaged across the entire group. Because group insurance averages out risks, it is generally a more affordable form of insurance than an individual insurance policy.

The purpose of life insurance is to protect your family in the event that you pass away. Because they depend on you to provide for them, if you are no longer around to provide for them, life insurance will provide them with financial stability. Term life insurance is a specific type of life insurance that provides coverage for a fixed period of time. The period of coverage for a large percentage of term life insurance policies is one year. When you are covered by a term life insurance policy, if you were to pass away during the year of coverage, your family would receive the benefits from the policy. With this type of policy, you will need to renew your coverage at the end of the year long term to ensure your family will still be protected. Unless a significant event has taken place during the course of your coverage, renewing a policy is generally easy. In many cases, the only change is either a decrease or increase in the premium.

Group term life insurance is a type of insurance that takes the concept of group insurance and applies it to a life insurance policy. Because a group term life insurance policy requires more than one person, it is most commonly offered by employers. When group term life insurance is issued by your employer, keep in mind that it should normally be used as a supplement to your own life insurance. The reason that group term life insurance should be used to supplement your own individual life insurance policy is because although it will provide your family with financial support, it most likely won't be enough to provide for them over the long-term. In most cases, the amount your family will receive from a group term life insurance policy will provide them with one to two years of financial stability.

While a group term life insurance policy from your employer probably isn't the only policy you want to use to protect your family, the generally affordable nature of this type of policy still makes it an option that is worth considering. Another advantage of enrolling in a group term life insurance policy from your employer is that your company's HR department will handle the annual renewal of the policy. The only time you will need to do anything is if there is a change in your life that requires the information in your policy to be updated. The most common update that people need to make to their policy is to change the beneficiary of their policy. If you need to change the beneficiary of your policy, be sure to do so promptly. The reason it's important to take care of this change right away is because not doing so could cause problems in the event of your passing. Out of date beneficiary information could make it difficult for your family to receive the benefits they deserve or even lead to a dispute between members of your family about who is entitled to receive the policy's benefits.

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