In a post-pandemic world, workers are becoming increasingly aware of the risks to their health and how their loved one would be protected should the worst happen. As a result, a company with a group life insurance policy could be an attractive place to work for a potential employee. There are several benefits and drawbacks involved with a group life insurance policy, and some people may find that it is not enough for their situation. This article will help you decide whether a group life insurance policy is right for you.
What is Group life insurance?
Group life insurance is an insurance policy that covers a group of people. Used by employers, it can typically cover thousands of employees. Should someone die while employed by the company, the policy will pay money to the loved ones of the deceased. This is often a multiple of the employee’s salary, usually two to four times, but it can be as much as 15 times more.
Another form of insurance available to employees is group income protection. Different from life insurance, group income protection insurance helps employees who are off work with long-term illness or injury, providing a replacement for your salary. You can also receive help to get back to work as soon as possible. Ultimately, both group life insurance and group income protection are designed to give employees and their loved ones peace of mind should anything unexpected happen. But whether they’re the right option for you depends on a few factors.
Group life insurance can provide numerous benefits to employees. Notably, the lump sum needed to take out the policy is organised and paid for by your employer, with little to no cost for you. This is a significant difference to a personal policy, which can often be prohibitively expensive. What’s more, group life insurance doesn’t take into account any pre-existing conditions, meaning you can still get coverage even if you have an existing illness or disability.
On the other hand, group life insurance provided by an employer will most likely only be valid while you are employed by said employer. This means that should you leave your job or be laid off you will no longer be covered by the policy. Depending on where you work, it may ultimately be more convenient to take out a personal policy rather than relying on group insurance. Furthermore, the cost of life insurance increases as you age, so should you leave your job several years down the line you may end up having to pay significantly more for a personal policy. What’s more, depending on your circumstances the amount you get from the group policy may not be enough for your loved ones.
Final thoughts
Ultimately, group life insurance has a wide range of benefits and drawbacks. It is often cheaper and more convenient than a personal policy, but it can end should you leave your job. Group life insurance can be a good benefit of your job, but it’s worth looking at it closely to see if it is enough for you and your loved ones.
