The term group life insurance is used to describe policies offered by business owners to employees. This allows both parties to leverage the buying power of a larger group or population. Providing group life insurance is an economical way for employers to offer this benefit to many employees.
Also known as institutional life insurance, group life insurance can offer employers attractive discounts on life insurance policies because the fixed costs associated with administering the program can be spread over a larger number of life insurance policies.
The various types of group life insurance typically offered by employers, affinity groups and consortia include:
Individuals with pre-existing conditions can benefit from group plans, since proof of insurability is normally not required or considered.