The Different Types of Group Life Insurance
One of the biggest benefits that employers offer their employees is life insurance. It’s a security check, helping you and your family feel protected and insured in case of any emergency situation.
Group life insurance is the way to go. Generally, it is cheaper than individual life insurance because your employer pays part of the premium. But what is group life insurance?
Group life insurance is a type of policy that provides death benefits to the beneficiaries of a group of people, typically employees. The policy is usually offered by an employer as a benefit to its employees. There are three types of group life insurance–term, universal and whole.
Term Life Insurance:
Term life insurance is the simplest and most affordable type of life insurance. It pays out a death benefit only if the policyholder dies within a certain time-frame, usually 10 or 20 years.
This makes it a great option for those who want coverage for a specific amount of time. It is also relatively cheap, making it a good choice for those who are on a budget.
While term life insurance is a good option for those who want coverage for a specific amount of time, it does have some downsides.
First, if the policyholder dies after the expiration of the term, the policy does not pay out a death benefit. Second, term life insurance is not as affordable as other types of life insurance policies. This means that it may be out of reach for some people.
Universal Life Insurance:
One of the biggest benefits of universal life insurance is that it offers a death benefit as well as a savings account. This means that the policyholder can save money while they are alive, which can be helpful for those who are on a budget.
Another benefit of universal life insurance is that it is more affordable than other types of life insurance policies. This makes it a good option for those who want coverage for a long period of time.
While there are many benefits to universal life insurance, it does have some drawbacks. First, the policyholder may find it difficult to make payments if they are on a tight budget. Second, if the policy lapses, the death benefit is not paid out.
This means that the policyholder may not receive the money they have saved if they die after the policy has lapsed. Finally, universal life insurance is more complex than other types of life insurance policies, which can make it difficult to understand for some people.
Whole Life Insurance:
Universal life insurance and whole life insurance are pretty similar in a lot of ways. However, there are some differences.
One of the biggest differences between whole life insurance and universal life insurance is the amount of money that the policyholder can save. With whole life insurance, the policyholder can save more money than with universal life insurance.
This is because, with whole life insurance, part of each premium goes into a savings account that the policyholder can access at any time. Another difference between whole life insurance and universal life insurance is that whole life insurance has a guaranteed death benefit, while universal life insurance does not.
This means that the policyholder knows exactly how much money they will receive if they die while they are insured under a whole life policy.
Making A Decision:
Choosing your group life insurance policy might feel overwhelming at first, but evaluating your options and choosing one that fits your lifestyle doesn’t need to be. Between term life insurance, universal life insurance, and whole life insurance–you have several good options to choose from.