Group life insurance can provide income for your loved ones if you die while covered by the policy, and it’s typically offered by employers as a workplace perk, or broader organizations like unions.
It’s a good idea to take advantage of a group life insurance benefit if one is available to you — but it may not take care of all of your life insurance needs. In some cases, you might need additional coverage on top of the group policy.
What is group life insurance?
Group life insurance pays out a certain amount of money to your chosen beneficiary when you die while the policy is in effect. Many employers offer life insurance as a workplace perk and subsidize some or all of the costs.
Coverage amounts are typically capped at low amounts, such as one to two times your annual salary. Let’s say your salary is $50,000 per year — your employer might provide a group policy with a life insurance face amount of $50,000 or $100,000. The coverage is generally guaranteed issue, which means you don’t need to take a life insurance medical exam or answer health questions to qualify.