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.
A second benefit to taking out a supplemental term life insurance policy is the Accelerated Living benefit. If an individual is diagnosed with a terminal illness and given only 12 months or less to live, that individual may apply for a percentage of their combined basic group and supplemental term life insurance policies. The percentage is usually paid in a lump sum. Check with your carrier, as the benefit is usually 50% of the active face value amounts or $50,000, whichever is less. In most cases, coverage is portable, which means you can take your coverage with you if you retire, reduce your hours or change jobs.
The only exclusion is the standard waiver of benefit payment should the employee or their spouse or dependents commit suicide within the first two years of the policy.
Does Age Affect Your Policy?
While premiums for supplemental term insurance quotes are literally just a few dollars each month, rates are affected by age. The premium is based on attained age and then increases at various steps. You would have to check with your carrier for their criteria.
Keep in mind is that spousal coverage terminates at age 70. Your spouse may choose to convert their individual coverage to a term life insurance policy of their own. Your dependents may also choose to convert their policies after their dependent status expires.