Group Life Insurance

Group Life Insurance

Insurance written on more than one life, typically for employee-employer groups.

Contributory Plan

An employee group plan where employees share the cost, requiring at least 75% participation.

Noncontributory Plan

An employee group plan in which employees do not share the cost, requiring 100% eligibility for all employees.

Master Policy

The actual policy issued to the employer in group insurance, as opposed to individual policies.

Certificate of Insurance

Proof of coverage issued to employees under a group life insurance plan.

Eligible Groups

Groups eligible for group life insurance must be formed for reasons other than purchasing insurance.

Adverse Selection

A situation where individuals most likely to need insurance buy it in higher numbers than those in good health.

Preferred Risk

Classification of applicants who have low risk and therefore lower premiums.

Group Term Life Insurance

Insurance typically issued as a guaranteed annual renewable term policy for group members.

Conversion Period

The 31 days after group coverage termination during which individuals can apply for individual coverage.

Franchise Life Insurance

Insurance for employees of a common employer or members of a common society, with each member issued an individual policy.

Group Credit Life Insurance

Insurance set-up by institutions to pay off a loan in case the insured dies before it is repaid.

Blanket Life Insurance

Insurance covering groups exposed to the same hazard without individual certificates of coverage.

Tax Treatment of Group Life Insurance

Benefits must be offered to at least 70% of employees and not overly favor key employees for favorable tax treatment.

Dependent Coverage

Coverage for a member's dependents under a group policy, typically not exceeding 50% of the member's coverage.

Group Permanent Life

Group life plans that offer permanent protection for insured members, such as group ordinary or group universal life.