What Is Group Universal Life Insurance

Group universal life insurance is one type of coverage, and this type offers both benefits and disadvantages. This policy covers a group of people, instead of just an individual, and it is usually offered as a benefit of your employment but in some cases it may be purchased privately. Group universal life insurance offers many of the same benefits that universal life does, but because an entire group of members are covered the cost is usually less than an individual policy would be. The amount that you are covered for can be determined based on your annual salary or it can be determined based on specific increments, like ten thousand or fifty thousand dollars. These policies offer flexibility, and unlike most employer provided plans these policies are paid for by the insured and not the employer. If you change employment, with this type of policy you may be able to continue your coverage even though your employment is not the same. Group universal life also involves a savings component, and this component will grow over time, and offers tax advantages as long as the balance is not withdrawn from the policy.

Some group universal life insurance policies may include an early payment option, so that if you are diagnosed as being terminally ill the death benefit is paid early, while you are still alive and when you usually need the money the most. The premium you pay may be flexible, depending on the cash value portion, and there is a death benefit offered just like with traditional life insurance policies. Group universal life insurance can be a great option if you are a group member, and you have access to this type of coverage. The premiums are usually less, but you get all the benefits of a universal life policy without the higher costs. Usually these policies do not require any medical exam or testing, and the coverage may be considered guaranteed issue up to a certain amount. There is normally no penalties if you choose to access the cash value portion of the policy either.

If you have group universal life insurance coverage, you may not be able to purchase all of the coverage you need through this method. Some group policies have maximum coverage limits which may be less than what you ideally want. In these circumstances you may want to buy a supplemental policy to make up the difference, rather than canceling the group universal life insurance coverage you already have and getting a new policy for the full amount somewhere else. A new policy may involve premiums that are a lot higher than the group coverage you cancel, and this can leave you paying more for the same coverage. If your employer offers group life insurance it is a smart financial move to take it, and the flexibility of group universal life will allow you more options than some other types, while charging less for the coverage. This policy type can be ideal for most group members, and if the maximum limit is too low you can always supplement your coverage to get it where you want it.