Group Term Life Insurance (GTL)
Group term life insurance is a type of term insurance whereby the insurer issues the employer a master contract with coverage extended to employees. Group term life insurance relatively inexpensive compared to individual life insurance. As a result, participations is high. It is commonly a companent of a comperhensive benefits package.
Group Term Life Insurance is a group benefit offered to employees who meet eligibility requirements, such as being a permanent employee or 30 days after hire. Group term life coverage can be adjusted for qualifying life events or during an open- enrollment period. The standard amount of coverage is usually 1-time the annual salary of the permanent employee. Employers typically pay most or all the premiums for basic coverage. Additional amounts, ordinarily in multiples of the employee’s anual salary, are usually offered for an extra premium paid by the employee.
Insured members receive certificates of insurance as proof of coverage. As with individual life insurance, insured parties choose their beneficiaries. Underwriting is typically not required for nominal face amounts. However, most companies set a threshold whereby limited of full underwriting is required.