If you’re an employer or the head of an organization, you may be in the market for group life insurance. Finding just the right insurance carrier can be tricky. Let the experts at Benzinga explain the ins and outs of a group life insurance policy and help you find the best group life insurance carrier for you.
The Best Group Life Insurance Carriers
If you’re an employer and you’re looking for group coverage for your workers, let Benzinga show you all the great benefits and prices of a group life insurance policy.
New York Life
New York Life Insurance is one of the oldest and is the third largest life insurance company in the U.S. The company offers both term and permanent life insurance policies like whole, universal and variable life. New York Life offers additional financial products such as annuities, long-term care insurance and mutual funds.
Group life plans are tailor-made to meet employees’ needs with choices of basic (employer-paid) or voluntary (employee-paid) term life plans. Coverage includes:
- Annual enrollment events
- Flat benefits and salary-based plans
- Policy admin solutions (full and partial service)
- Streamlined claims process
- Group coverage value and convenience
- Additional financial protections
- Living benefits with terminal illness coverage
- Access to additional financial tools
Founded in 1857, and headquartered in Milwaukee, Wisconsin, Northwestern Mutual offers 12 different life insurance plans (seven total policy types). Types of life insurance include:
- Term life
- Whole life
- Variable life
- Final expense
The company also offers such riders as:
- Waiver of premium
- Additional purchase benefit
- Accelerated care benefit
Northwestern Mutual offers both employer and employee-paid group life insurance plans with the option of adding additional life insurance benefits. Group life policyholders can choose to add individual term and whole life converge. Group life policies are convertible to individual plans.
State Farm is the largest P&C insurance provider in America, best known for its home and auto plans, but the company sells life insurance, too. Life insurance plans include:
- Select term life insurance: Policies available from 10, 20 and 30 years and renewable up to 95 years of age. Coverage begins at $100,000.
- Instant answer term life: $50,000 coverage for people aged 16 to 45. Lasts until age 50.
- Return of premium term life: Policy terms at 20 and 30 years guarantee return of premiums at end of term.
The company also sells permanent coverage, like whole and universal, plus group life. Group life policies are offered in groups of five or more and offered in all 50 states except Massachusetts and Rhode Island.
Founded in 1925 with headquarters in Columbus, Ohio, Nationwide is one of the largest financial services companies in the world. The company offers term life insurance policies ranging from 10 to 30 years, providing coverage up to age 95.
For 20-year term policies with $1 million coverage, non-smokers, average monthly premiums would be:
Nationwide offers group coverage including both employer and employee-paid group life insurance. The company offers group benefits as well, including:
- Caregiver family leave insurance: financial protection for caregivers
- Medical stop-loss: self-funded medical coverage
- MedPair supplemental health: additional coverage for major medical
Mutual of Omaha
Mutual of Omaha is one of the best-known mutual insurance companies in America. The company offers term, whole and universal life insurance with riders that cover:
- Chronic illness
- Terminal illness
- Waiver of premium
- Accidental death
Term life policies include Term Life Express and Term Life Answers. Term life insurance through Mutual of Omaha is guaranteed level, meaning premiums do not increase during the term of the policy. The company also offers group life policies, both voluntary and non-contributory option plans. Plans include flexible designs, annual increase options and living care benefits. Death benefits are paid directly to the beneficiaries, and coverage is fully portable.
Nationwide offers enrollment solutions such as:
- Pre-enrollment strategy meetings
- On-site group meetings
- Professional enrollment reps
- Communication materials
- 3rd-party enrollment resources
Founded in 1851 in Springfield, Massachusetts, MassMutual offers a wide array of financial products, including life insurance. Plans include term, whole, universal and group life insurance. All policies have the option to add standard riders, such as accelerated death benefits and waiver of premium, at no extra cost.
The company offers group whole life insurance through its MassMutual@WORK Group Whole Life Insurance plan. Whole life insurance protects over your whole life while building cash value at the same time. Group policies include:
- Built-in guarantees: guaranteed death benefit, cash value and level premiums.
- Portable coverage: uou own the certificate and can take the cash value with you when you leave your job.
- Dividends: certificate owners are eligible for dividends each year.
What is Group Life Insurance?
Group life insurance is a type of life insurance, usually offered by an employer or an organization (like a labor union), in which a group of people are covered by just one contract. The policyowner is the head of the business or organization, while the insured is the employee or member. Group life insurance is typically offered as part of an employee benefits package and costs less per person than someone getting the same coverage on their own.
Group life insurance plans are typically term life policies. Policies are usually renewed annually, and the employer pays the premiums. The amount of coverage is usually 1 or 2 times your annual salary. The policy remains in force until the time when your employment is terminated. Although you cannot take your existing coverage with you, you can convert it into an individual policy. While this can be more expensive than finding a brand new policy, it is an advantage to those people who may have health issues or pre-existing conditions.
Advantages to a group life insurance policy include:
- Cheaper premiums
- Acceptance guaranteed
- No medical exam required
Group life insurance is a multi-approach plan to term life insurance that not only makes the process easier but more affordable. Because you’re part of a larger group, less scrutiny gets placed on you, the individual. Pre-existing conditions and health issues are not documented.
How Much Does Group Life Insurance Cost?
Group life insurance is often free to you because your employer pays the cost as long as you work at the company. Policies are typically convertible upon leaving the workplace.
Can You Take Group Life Insurance With You?
A group life insurance policy stays with your job. If you leave your place of employment, you’re not going to be able to take your group life insurance policy with you. You may be permitted, however, to convert your group policy to an individual one.
The general rule is that you have 31 days from the last day at your job to submit your application. Typically, you can apply for any type of life insurance the company offers. Supplemental types of life insurance that may have been available through your group plan, like disability, may not be included in your new plan. Although no medical exam is required, rates will go up depending on your age. The advantage to converting your policy over getting a brand new one is that you’ll be approved for coverage. Applying for a brand new policy does not guarantee coverage, especially if you have pre-existing conditions.
The Pros and Cons of Group Life Insurance
Whar are the pros and cons to group life insurance?
- Price: Group life insurance through your employer is not only more affordable, it’s often free. Both you and your employer are invested in your job.
- Convenience: Applying for a group life insurance policy is typically done at the time of your hiring and all the paperwork goes through HR. For you, there’s really nothing to do except sign on the dotted line.
- Acceptance: Group life insurance plans are virtually guaranteed acceptance. Even if you have serious medical conditions, chances are you’ll get approved. Acceptance for supplemental plans also runs along the same lines.
- Limited choice: More times than not, group life insurance is a term life policy, which limits your choices. If you’re looking for additional types of life insurance, like whole or universal life, you can buy those on your own.
- Low coverage amounts: With a group life insurance policy, you don't set the coverage amount. The typical group life insurance policy begins at $25,000 and maxes out at $100,000. If you’re looking for more coverage, consider adding an individual policy of your own.
- Coverage is coupled with your job: If you leave your job, you’re not going to be able to take your insurance with you — at least, not in its current form. You may be able to convert the policy into an individual one, but your rates may go higher as a result.
Frequently Asked Questions
Is group life insurance cheaper than individual coverage?
Group life insurance is cheaper than an individual coverage because your employer either pays for part of or the whole policy. Group life insurance is either term or whole life. Whole life policies are often portable, meaning you keep the cash value even after leaving the company.
What are the benefits of group term life insurance?
The benefit of a group life insurance policy is that you often get life insurance for free. Most group life insurance plans are employer-sponsored and convertible upon exiting the company. Employee-paid plans are often shared plans with the employer, and convertible as well.
Benzinga crafted a specific methodology to rank life insurance. To see a comprehensive breakdown of our methodology, please visit our Life Insurance Methodology page.