Most companies and many professional associations as well as some trade organizations offer a form of optional group life insurance coverage to their employees and/or members. The coverage can normally be tailored to each individual’s situation, similar to private term life insurance.
The premium for this type of coverage may be less than that of personal life insurance. The reason for the reduced cost is partly because the benefits are sold on a “group discount” basis. Another contributing factor to the low cost is due to a degree of uncertainty relative to whether a member’s family will actually collect benefits under the plan. This is because the group or association coverage can usually be canceled at the discretion of the insuring company (if claims are excessive).
Also, premiums are not guaranteed and thus can be increased at any time to offset any bad claim experience.
Association group coverage should be viewed as a method of merely “reducing risk”, in comparison with private life insurance which “eliminates risk”.
Contact us today to learn more about group insurance and association insurance.
Follow Us!