Although most employers once offered only group term life insurance as part of an employee?s benefits package, many now offer group universal life insurance instead. The advantage of buying any insurance as a group is that individuals receive lower life insurance rates. Unlike group term life policies which usually expired when the employee left a job, employees pay the full cost for permanent universal life coverage and can usually maintain the policy if they retire or change employers.
Universal Life Insurance Pros and Cons
Pros. Unlike term life insurance which only offers financial protection to survivors if the insured person dies, group universal life insurance devotes some of the premium dollars to an investment feature which accrues cash value, or equity, over time. Term life insurance expires at the end of a specified term and must be renewed at a higher rate, but universal life insurance is permanent. Minimum rates for universal life policies may be increased by the insurer if the cost of life insurance protection increases.
Pros. Universal life policies do not have fixed payments like whole and term life insurance. Instead they offer minimum and maximum payments so the insured person can choose how much to invest in the policy. If a policyholder cannot make a payment, he or she can opt to have the payment deducted from the cash value of the policy to prevent the policy from lapsing. Those with group universal life insurance may need to adjust their payroll deduction with their employer if they wish to increase their investment.
Cons. In most cases, the policyholder does not have the opportunity to choose the death benefit amount of a group life insurance policy. The amount is chosen by the employer using the employee?s salary or other criteria. This may mean that the group universal life insurance policy may not provide enough protection for a family. The insured person can continue to take advantage of the group insurance rates and supplement the death benefit with a cheap term life policy.
How To Get Group Universal Life Insurance
While group life insurance is most commonly offered by employers, other organizations and associations may also offer group universal life coverage. These include fraternal organizations, trade unions, business associations and even credit card companies which require membership. Those interested in purchasing group universal life insurance should check with organizations or associations to which they belong to find out if they have group life insurance opportunities.
Other Advantages of Group Life Insurance
Generally, members of a group cannot be turned down for that group?s life insurance regardless of age or physical condition. Because group universal life insurance is a permanent policy, once the individual secures the insurance it cannot be canceled by the insurance company. Group universal life insurance offers investment potential to individuals who might otherwise be unable to afford an investment account. The equity of a life insurance policy can be used to meet financial goals.
Life Insurance Rates
Group universal life insurance offers lower rates than individual universal life policies because it spreads the risk of loss among an entire group of people. While group universal life insurance minimizes the investment risks of individuals, there are some risks inherent in this type of policy, so buyers should conduct some research into the policy and the insurance company before deciding to participate in group life insurance.
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Source: http://www.lifeinsurancerates123.com/group-universal-life-insurance/
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