Group Life Insurance

What is Group Life Insurance?

Group life insuranceis a type of policy through which a company or an institution offers life insurance for its employee or members as a benefit.

Generally, the total amount of group life insurance an employee is entitled to, is based on multiples of their annual salary. Usually, the ratio is about 1 or 2 times annual salary. Some companies offer up to 5-6 times annual salary for higher management and lower multiples for normal employees.

Pros of Group Life Insurance

1. Group life insurance is a good way to retain skilled employees and attract new talent. A company that offers group life insurance as an added benefit can be an employer of choice for existing staff and new talent as opposed to the competition.
2. Group life insurance is cheaper than most individual life insurance policies. This is because the risk of death is spread over a group instead of an individual and chances of making a loss are less for the insurance providers.
3. Many group insurance policies offer additional benefits without waiting periods depending on the size of the group.
4. It is easy to add or remove employees from group life insurance policies because of the flexibility of the products.
5. Most international life insurance providers will not cover individual policy holders or new applicants in hotspots such as Afghanistan, Syria, Iraq, Sudan, Yemen etc… But the same employees will be covered under a group life insurance policy if the rest of the group is outside the hotspots and only some employees reside in these war risk countries.

Cons of Group Life Insurance

1. In event that an employee change his/her employment or gets fired, the group life insurance policy will be gone. This is because the group life insurance policy is owned by the company, not the employees.
2. Group life insurance is not a replacement for individual life insurance no matter how high the cover provided by the company. Employees should always have their own individual life insurance policies in case they have to change jobs or get fired.
3. Group life insurance policies are not portable and cannot offer cover if the employee leaves the company.

How to get Group Life Insurance for your company

The best way to get group life insurance is to let a professional financial advisor evaluate your company’s unique requirements and offer a tailor-made solution through the various insurance providers in the U.A.E.

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