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Songer Benefits, Inc. Blog

All You Ever Wanted to Know About Insurance

Group Retiree Life Insurance

Group Life Insurance After Retirement

Group term insurance plans were initially designed to give employees with preretirement life insurance coverage. Recently, however, a growing number of group life insurance policies have been created to Provide postretirement and preretirement group life insurance coverage. When an employee retires, they are faced with whether to let coverage terminate or convert to an individual life policy at a highly high premium right. In many cases, this is accomplished by continuing their group term insurance coverage, sometimes reduced after they retire. In some other cases, it is done through life insurance that provides permanent benefits funded during the employee's working years.

Most life insurance after retirement consists of continuing the group term insurance. This requires the employer to make a few critical decisions: the amount of coverage to be continued and how they will pay for the coverage that will continue. However, the total amount of coverage before retirement may be continued; the high cost of group-term insurance coverage for older employees frequently reduces the amount of coverage.

Group Universal Life Insurance 

Group universal life insurance is A flexible premium policy that, unlike traditional cash value life insurance, divides pure insurance protection and cash value accumulation into separate and distinct parts. The employee must pay an initial premium, from which a charge is subtracted for one-month insurance protection. Group universal life insurance offers exceptional employee flexibility to meet many different life cycle financial needs with single insurance coverage. The death benefit can be increased because of marriage or the birth of a child, or increased income. The death benefit can be reduced later if the need for life insurance decreases. Cash withdrawals can be made for the down payment on a home or to pay college tuition. Premium contributions can be reduced during these periods when a family has some kind of critical financial need.

Group Variable Universal Life Insurance 

Group variable universal life insurance has the same essential characteristics that are in universal group life. There is, however, one significant difference between these two, which is employees have a series of investment accounts to which they may contribute their net premiums. Once an employee selects the initial allocation, all future premiums or allocated in the same proportion, and that's the employee makes a written request for a change. Group variable universal life insurance contracts may offer up to 20 and sometimes more different investment funds. These usually include at least one and sometimes more of the following. Growth funds, bond funds, money market funds, index funds, mortgage security funds, international stock funds, and other small company stock funds. Employers can choose the investment options that are available to employees.

Selecting Group Life Insurance

When choosing group life insurance, there are several options that you will face. This is why it is essential to use a registered employee benefits consultant. They will help you select group term carveouts, bonus plans, another type of carveout plans, dependent coverages, loans and withdrawals, tax treatment, accidental death, and waiver of premium. Many factors go into retiree life insurance. It is essential to select the best option for your company and your employees. At Songer Benefits, we offer a wide range of retiree life insurance policies for your company. For more information And to receive an in-depth consultation for your life insurance needs, please contact us.