Many small businesses can't afford to offer their employees a group term life insurance plan. You can sign up for a Flexible Plan of Group Term Life Insurance policy if you work for a small company with at least five employees and your employer doesn't have a basic group term life insurance plan or a voluntary supplemental term life plan.
How It Does It
Group term life insurance with a flexible plan is something that employees set up and pay for. It was made so that employees who don't have a group plan paid for by their employer could get low-cost group term life insurance. It is also for groups that are NOT covered by a Basic Group Term Life Insurance plan from Beneficial Life. Flexible plans are optional programmes in which the employer does not have to pay anything.
Choices that affect how much a group policy costs
Rates for flexible plan term life insurance depend on whether the group wants fully underwritten coverage or guaranteed-issue coverage. The whole group has to pick one or the other. If the group chooses to go with the fully underwritten option, they will have to fill out a one-page health form/questionnaire when they apply. The health form on one page is for the whole group. If the group chooses the "guaranteed-issue" option, they won't have to fill out health questionnaires or get medical exams. However, the group term life insurance rates will be higher because the insurance company will cover the group no matter what.
The rates for flexible plan term life insurance will also depend on whether the group applies as "tobacco-free" or as "tobacco-users." There is also the choice to mix the two.
Even though the premiums change based on age and coverage reduction schedules (which allow active employees to keep coverage after age 65), you can buy a flexible plan group term life insurance policy with a rate guarantee for one year. Also, if an employee wants to retire or quit their job, they can change their policy into some kind of permanent coverage. There are no waivers of premiums due to disability.
Restrictions
As with all plans, flexible plan group term life insurance policies have some limitations:
- Premiums must be paid by taking money out of a person's paycheck.
- Coverage ends when the worker turns 70 years old.
- You can't apply if you work in an industry that is considered to be dangerous. Your spouse's coverage is also based on his or her job.
- Spouses can get coverage, but the face value of the policy can't be more than the employee's or $250,000 (depending on your state's rules).
- Children who live with their parents can be insured for $2,500 or $5,000 until they are 26 years old. Proof that you can be insured is needed.
Flexible plan group term life insurance isn't available in all states, so it's best to talk to a business financial advisor who knows what they're doing.
