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When a group of people purchase term life insurance together, the policy is known as group term life insurance. Many employers offer group term life insurance to the people who work for them.

Most life insurance companies prefer to sell group term life insurance instead of individual policies. Why? Because when they provide coverage for an entire group, the administrative processes are simplified. There is less paperwork to complete, and fewer inquiries to respond to, and fewer changes to implement. Consequently, many companies offer special incentives and discounts for group insurance policies. This makes group life insurance significantly cheaper than individual policies.

Just like individual term life insurance policies, group term life insurance policies pay benefits to the designated beneficiaries when the policy holder passes away. When it is an employee-sponsored group insurance policy, the benefits are often calculated as some multiple of the employee’s salary, but this isn’t always the case. However, it makes sense to tie the amount to the employee’s earnings, because the surviving family members will be accustomed to that level of income and their financial security depends on having that amount be maintained.

Supplemental Group Term Life Insurance

Group coverage often does not suit all the employees’ requirements because the policies are written to benefit the group as a whole. An individual with a family may have different needs and anyone in this situation may buy and add a supplemental term life policy to tailor the group policy for himself.

An employee is eligible for supplemental term life insurance if he or she performs all of their regular duties on a full-time basis but you must be covered under your company's basic group policy. Spouses and children are also eligible for coverage.

Is There Any Benefit To Adding A Supplement?

There are a couple of benefits. The first is a waiver of premium. Should you become disabled before your 65th birthday, the insurance company will keep your policy active until you reach age 65. Your disability must last for nine consecutive months before the benefit can begin. If your disability continues indefinitely, the insurance company will not collect any further premium payments.

Do you work in an industry where your physical health and well-being is of vital importance? If so, you could benefit from taking out a term life insurance policy that features a disability rider.

A disability rider coupled with a standard cheap term life insurance policy gives you extra coverage in the event that you are disabled or injured in any way that will affect your performance in the workplace. If you work in a factory or outdoors, this type of insurance coverage offers added security. Why face financial ruin in the event of an accident or other circumstances beyond your control when a term insurance policy and disability rider can help you out?