Group Term Life Insurance
Definition: It’s that type of insurance where the coverage is offered to a group of people. This coverage offers benefit to the insured group even if one of the beneficiaries dies during the specified (coverage) period.
Just as group of people get economical benefits, a group life insurance is also cheaper compared to individual policy coverage. That’s why; group term life insurance is often a significant component in employee benefit packages.
In general, group term life insurance plans are offered by employers to employees.
The cost of the initial $50,000 of group term life insurance premiums is tax-free to employees and deductible for employers who pay the premium expense.
The cost of any additional term coverage will typically show up in box 14 on an employee’s W-2 form.