Group Life Insurance

What Is Group Life Insurance?

Group life insurance is a life insurance policy that provides coverage to a group of people under a single contract, typically employees of a company or members of an organization. Employers often offer group life insurance as part of an employee benefits package.

Coverage amounts are usually based on a multiple of the employee’s salary or a fixed benefit amount.

Why It Matters

Group life insurance helps provide financial protection for employees’ families while often costing less than individual policies. Because coverage is offered through an employer or organization, it may be more accessible for individuals who might not qualify for individual policies.

It can also be an important part of workplace benefits.

How Group Life Insurance Works

Employers or organizations purchase a group policy that covers eligible members.

Key features may include:

basic coverage provided by the employer
optional additional coverage for employees
premiums often partially paid by the employer

Coverage usually remains active while the individual remains part of the group.

Example

An employer may provide group life insurance equal to one year of an employee’s salary as part of its benefits program.