Key Benefits of Group Life Insurance
While health insurance is an employee benefit that comes to mind first, life insurance is less thought about in the employee benefits world. In this article, we’ll explore key advantages of doing group life insurance vs. a personal life insurance.
Personal Life Insurance
Before getting into the benefits of group life insurance, you must first understand how normal personal life insurance works. With life insurance, pricing variables include:
- Age
- Nationality
- Residence Country
- Gender
- Smoking Status
- Sum Insured
- Term Length
- Education Level (for some)
And in order to get life insurance, you must go through medical underwriting. That is the process of declaring your medical history, any pre-existing conditions and then getting a health check. Depending on your age, sum insured & what’s been declared, you may need to provide:
- HIV test
- Chlesterol
- Blood or Urine sample
- Medical Exam Report
- Other information specifically asked for by the provider.
It can be a pain, yes. However, you know what you’re getting before you buy & once you’re underwritten, you’re good to go for the life of your policy with nothing to worry about. Providers who do this typically only have 3-4 exclusions.
Pro tip: never buy personal life insurance that has no medical underwriting. They’re taking your money, delaying underwriting until death, have dozens of exclusions, which they will find a way not to pay out. Which isn’t the purpose of life insurance.
Group Life Insurance Benefits
No Medical Underwriting
With group life policies, a major benefit is that you don’t have to go through medical underwriting for each employee. Just like with group health insurance, you can get all of your employees covered by simple declarations and skip any medical exams & tests.
Free Cover Limit (FCL)
Your employees can get coverage up to the free cover limit, which is the maximum amount of insurance each employee can have before any medical undewriting would need to take place. This is based on how many employees you have and their demographics.
Lower Costs
Group life insurance premiums are typically much cheaper than individual plans. This is because insurance companies can offer a lower rate when covering a large pool of people, regardless of their health or age.
Benefits
Group life insurance can cover death from all causes, you could also optionally add-on other things like:
- disability
- critical illness
- personal accident
- income protection
If you’re looking for a cost-effective way to expand your employee benefits offering in 2024, look for group life insurance. Separate yourself from your competition & provide a critical benefit to your employee’s loved ones. I can assure you that most companies do not offer this as a standard employee benefit.
