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Table of Contents

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Group Life Insurance
Burton T. Beam, Jr.

Chapter Outline

GROUP INSURANCE CHARACTERISTICS: The Group Contract; Experience Rating; Group Underwriting

THE GOVERNMENTAL ENVIRONMENT FOR GROUP LIFE INSURANCE: State Regulation; Federal Regulation

GROUP TERM LIFE INSURANCE: Contract Provisions; Added Coverages; Taxation

POSTRETIREMENT GROUP LIFE INSURANCE: Continuation of Group Term Insurance; Group Universal Life Insurance; Group Variable Universal Life Insurance

The majority of this book is devoted to a detailed analysis of individual life insurance. However, a large portion of life insurance is written on a group basis. The significance of group life insurance is evident from the following statistics:

Coverage amounting to $4.7 trillion is in force under approximately 1 million master contracts and 145 million certificates of insurance. This amount represents a doubling of the amount of insurance in force since 1994.

Over 90 percent of the coverage in force is term insurance.

Employer-employee groups account for approximately 90 percent of coverage in force.

Group insurance amounts to 40 percent of total life insurance coverage, up from 20 percent in 1950.

The amount of coverage under the average-size group life insurance certificate covering persons in employer-employee groups is approximately $33,000, compared to about $50,000 under the average-size ordinary life insurance policy in force.

Over 700,000 beneficiaries each year receive a total of over $12 billion in benefits.

This chapter describes group life insurance by looking at its characteristics, the governmental environment within which it is written, and the types of coverage that are in force. The focus is on the use of group life insurance as an employee benefit. However, as is briefly mentioned later, some group insurance is written outside an employer-employee relationship.

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