Some employers or large entities offer group life insurance as an added benefit (or part of a larger benefit package) to their employees or members.
Coverage providers offer the option to purchase life insurance as a wholesale package to simplify the process and reduce the average cost of coverage for each individual.
MASTER CONTRACT AND CERTIFICATE OF COVERAGE
The master contract is retained by the organization purchasing the policy. The organization, along with the insurance provider, gives a certificate of credible coverage to its employees. When an individual leaves the organization and is no longer availing the benefits, he/she must keep the certificate and provide it to their next insurance provider.
BENEFITS ALL THREE GROUPS
Most of the group life insurance programs have a premium cost which does not consider individual risks. Therefore, it’s the same amount for all of the insured people in the group, which means that everyone in the group pays the same amount in premiums, regardless of age or other factors.
Thus, the group life insurance policy is also attractive to the consumers due to the lowered average price per policy. The insurance providers are more than willing to lower the price because of the huge influx of customers from the group in a single policy.
Usually in the case of group life insurances, the members have no say in the specifications of the coverage. They can either opt to be included in the group or not.
Majority of the professionally run companies provide group life insurance as part of their Employee Welfare program. Each company gets their plan customized based on the demographics of their employees.