Life Insurance Types | Buying Life Insurance | Understanding Life Insurance | Glossary
McAfee SECURE sites help keep you safe from identity theft, credit card fraud, spyware, spam, viruses and online scams
Your information is secure.
What kind of life insurance do you need?

Group Term Insurance

While individual term life is sold directly to policyholders, group term life insurance is sold to corporations and other organizations. These entities, usually employers, then offer the coverage to their employees or members at a subsidized cost. With group term life, policyholders do not have to pass a medical exam to qualify for coverage, and the premiums of a group term life insurance benefit package tend to be lower than those of individual policies. Read on for additional information on group term life coverage.

Pooling Risk

Organizations purchase group term life insurance in large quantities to distribute to many different people. By doing so, the organization spreads the life insurer's risk among a large group, thereby reducing the risk inherent in underwriting policies. As a result, group term life insurance benefit packages are typically much cheaper than individual policies. For example, the costs of insuring a 65-year-old with employer-sponsored group term insurance will be balanced out by another employee who is 25 and healthy. In essence, the younger, healthier employees subsidize the cost of term life group insurance for the older, sicklier employees.

Benefits of Group Term Life

As mentioned previously, group term life insurance can offer lower premiums in most cases than individual term life policies. Other benefits of group term life include:

  • Simplicity. Most employers and organizations simply require their employees or members to complete one form to opt in to the group life insurance program. There are no lengthy applications or involved processes.
  • No medical exam required. One of the most appealing perks of group term life insurance benefits packages is that no medical exam or medical history is required. Individual term life policies require the applicant to pass an involved medical exam, but group coverage usually comes with guaranteed acceptance with no exam requirement.
  • Relief for high-risk groups. Those who have trouble finding coverage on the individual market because of certain personal risk factors can almost always find coverage through group term life insurance. Employers tend to offer term life as a standard component of benefit packages, and even some organizations and clubs offer discounted group term life as well.

Finding Group Coverage

Before you seek out a group term life insurance benefit package, request quotes through our site to verify that individual coverage is not the better choice. In a significant number of cases, individual policies are sometimes cheaper than what you might get through a group structure. You can research the costs and benefits of both types of term life coverage by obtaining free quotes now.