Group life insurance is an optional program provided by many employers and sometimes other organizations. Group life insurance provides employees a set amount of coverage based upon their salary with the employer typically paying the deductible for the policy. Sometimes, employees may be able to pay for extra coverage through the employer policy. While each participating employee receives coverage, the employer or other provider is the only owner of the policy. Most group life insurance policies are term policies, meaning the coverage only lasts as long as the employee works for the employer, and therefore, group life insurance policies usually do not include options such as investment opportunities. Many employees prefer group life insurance policies because they are often cheaper than individual policies and often do not involve medical considerations. However, employees usually cannot transfer the coverage to another job and may benefit instead from long-term individual policies.
[Last updated in February of 2022 by the Wex Definitions Team]