What is Group Life Insurance?
Group Life Insurance is often provided by companies to their staff as a benefit of employment. This could take the form of a free or subsidised life insurance policy for a multiple of salary, for example, two to four times your salary.
What are the Dangers of Group Life Insurance?
While free or subsidised life insurance may sound like a good employee benefit there are some drawbacks. To be eligible for cover under a group life insurance policy you need to be employed by the company. If you move to another company the life cover will end. If you have to buy life cover elsewhere it could cost you a lot more than if you had your own policy from when you started working for the company, as you will be older and may have medical problems which will push up premiums further. Your employer may decide to stop offering free or subsidised cover and you will be left without cover.
You may also find that group life insurance cover will only be active while you are working for the company, you may not be covered if you are off work ill, for example.
The amount of cover from group life insurance may also not be sufficient for your needs, but you may think it is enough. You also won’t normally be able to choose the amount of cover you get or the type of life insurance. If you are paying for the group life cover you could probably get cheaper life cover elsewhere.
Benefits of Group Life Insurance
As it is a group policy there are usually no medicals and you may not be asked any medical questions to be eligible for the reduced or subsidised life cover. If you aren’t paying for the group life cover then it reduces the amount of cover you need to get in addition to make sure your family is properly protected.
What to do if you have Group Life Insurance from your employer
If you are lucky enough to have group life cover from work it is best to view this as additional cover and you need to make sure you get adequate life cover for your needs. The cover you get from employer almost certainly won’t give you adequate cover and provide for your family financially if you die.
How to find the right life insurance policy
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