Does Group Life Insurance Work?

  1. 12689 POINTS
    Ted Ratliff
    Owner, SFS Associates,
    Most group life offered by the employer is term insurance that will cover you while you are employed. Some companies will continue your insurance at a reduced amount after retirement and some give you an option of converting the insurance to a whole life plan and you would pay your own premium. Group term life will only pay while it is in force, meaning while you are employed. Never rely on group term life coverage as your only source of life insurance. In today's economy you could find yourself out of work and if you are sick, uninsurable Always carry at least enough insurance to pay final expenses and pay off outstanding debt.
    Answered on April 21, 2013
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  2. 11783 POINTS
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    Larry GilmorePRO
    Agent Owner, Gilmore Insurance Services, Marysville, Washington State
    Yes, Group life insurance works. Group life will pay a claim, just as an individual policy would. The question with group life, is should it be your only form of life insurance?  While it is nice that a portion is picked up by most employers (up to 50,000) as they get a tax deduction for providing coverage to a point. However, as an individual on a group plan, you have no control over the situation. If your employer changes plans or decides to end the benefit, you have no coverage. Where this can become a problem is if your health changes while in the group plan. The plan ends, you still need coverage, but your health may prevent you from getting covered or covered at a reasonble price. With group coverage, you don't have a lot of say over the coverage. It is always better to find your own coverage that suits your needs and then using group coverage as bonus coverage as no telling if it will be there when you need it to be.
    Answered on April 22, 2013
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