Group Life Insurance: what is the concept, and how does it work?

Many say that a company is the reflection of its employees, so taking care of the team is a fundamental job that every manager should keep. Offering group insurance to employees is one way to do this, as they are better protected in the event of unforeseen circumstances.

Do you want to know a little more about group life insurance and its advantages among the benefits offered by your company? Keep reading!

What is group life insurance?

It has coverage against accidents or illnesses that result in death or disability. It is usually offered by companies to benefit their employees and can be customized according to the need.

In many segments, life insurance must be guaranteed to workers. This obligation is based on unions or responsible bodies’ group category agreements and, therefore, may vary according to function and location.

What is group life insurance for?

As previously stated, group life insurance is a benefit that companies can offer to their employees to ensure their protection in accidents. Also, it is also a way to differentiate these companies in the market and, consequently, to attract and retain talent.

Thinking about the insured, group life insurance serves as a kind of guarantee, as it ensures that, in case something happens to him, his family members will not be helpless. The coverages offered by group life insurance are:



Serious diseases;

Medical, hospital and dental expenses ;

Funeral insurance.

Advantages of group life insurance

In addition to everything we have already mentioned, there are other advantages associated with group life insurance.

High benefit at a low cost;

Free choice of the insured capital value for employees;

Tranquility for the worker, as the family will not be helpless;

Possibility of new coverage to further enhance the benefit;

It is another point to help retain and attract employees.

How does group life insurance work?

To answer how group life insurance works, let’s start at the beginning. There are a minimum and maximum number of employees that a company can include, and there is also an age limit: employees must be between 14 and 65 years old.

In order to be included, the worker must have good health conditions – any pre-existing injury or illness must be informed – and be in full professional activity.

Group life insurance costs less than individual life insurance and, regarding payment, there are two types of insurance:

Non-contributory plan: the company bears the costs;

Contributory plan: the employee pays part of the amount and is normally already deducted from the payroll.

Some insurances also cover spouses and children and, to find out exactly how your company’s group life insurance works, it is important to inquire with the Human Resources area, as coverage and indemnities may vary.

In the event of a claim, the insured or his family members must inform the employing company, and they contact the insurer to request compensation. The civil code does not consider life insurance as an inheritance, so this money is not discounted to pay off possible debts of the insured; its purpose is actually to pay expenses related to the claim.