Group universal life insurance is a kind of permanent life insurance which provides universal coverage to all the people covered under it. This insurance is very useful as it gives you protection from loss of income, while giving you additional benefits, such as boosts in your savings and investment returns. As such, it becomes all the more important to look into these policies carefully before taking one. This policy can be customized according to your needs. The premiums for this kind of policy are generally much cheaper than for any other kind of permanent life insurance. However, there are certain things that you should know before going for this kind of a policy.
The main feature of group universal life insurance is the flexibility of the payment options. The insured individual decides how much he or she would like to receive in the form of premiums. The interest rate can also be chosen according to your preference. This option will reduce the monthly payments substantially since the interest rate is fixed. However, you will have to make heavy withdrawals from the cash value to pay the premiums.
There is another feature of group universal life insurance, called term life insurance. Unlike the premiums, which are paid in the immediate period mentioned above, term life insurances are paid only during the specified term. Therefore, if you are planning to make huge monthly deposits in the plan, then you must go for term coverage. A term coverage policy will also cost less, since it does not have an adjustable premium. On the other hand, there is another group universal life insurance plan known as whole life insurances which has a level premium coverage that is adjusted monthly.
There are two basic options available in term insurance coverage plans-the level premium policy and the increasing premium policy. With the level premium policy, the death benefit remains constant and the amount of cash accumulated during the term is equal to the death benefit multiplied by a certain amount of premium paid per month. In this kind of plan, there is no maturity date in terms of premium payment. In case of increasing premium policies, the cash value increases at a specified monthly amount up to a maximum of the current premium amount. The benefit is fully transferred to the surviving beneficiary upon the death of the insured person.
When you buy group universal life insurance, please note that there are certain limits in terms of the total coverage amounts. It is very important that you check the details with your local group insurance agent or representative in order to avoid confusion later on. Usually, you will receive a coverage limit that is lower than the actual total coverage amounts. You may contact your agent for more information.
Please note that different states have different definitions of death benefits and benefit limits of group universal life policies. Most companies provide standard death benefits that are fixed for each term. There are also some companies that allow the option for an additional term, often as many as 25 years in length. The premium is usually determined by the age at death of the insured person, with some companies providing better deals to young adults who are relatively young.
Some employers have the option of purchasing group universal life insurance through payroll deductions rather than as a group policy. Before you finalize your options, please note that this will affect both the premiums and the death benefit. So it is important to shop around. Please remember that the basic life insurance company quotes are just rough estimates given in an effort to give you a general idea of what your choices may be.
Last but not least, you should also check on the stability of the insurer. For instance, you can find out more about your insurer by checking their credit rating, most people tend to go with the more reliable insurers. They are rated by the Financial Services Authority. Once again there are a variety of details to consider so please do not think that all the information is provided here. You should always get more information when it is necessary.