What Is a Group Universal Life Policy? A group universal life insurance policy is a type of universal life insurance that is offered to a group of people at a cheaper rate than individual coverage. Group universal life insurance is commonly purchased by businesses that wish to provide their employees with life insurance. These policies give each insured person with continuous protection as well as the opportunity to add to their savings.
How Group Universal Life Policies Work
Many businesses provide group universal life insurance as part of their staff benefits package. Coverage may be expanded to spouses and other, immediate family members. Group universal life insurance, like other plans, pays a death benefit to the insured party’s beneficiaries while also providing a savings component to use in the future.
Employers may pay for the premiums in full, or they may split the cost of coverage with their workers through pre-tax payroll deductions. The expense of coverage is significantly lower than that of purchasing an individual policy.
After a year or so, most insurance policies have some cash value. These amounts are placed in a guaranteed account and get the policyholder a minimum fixed interest rate.
The cash value may be withdrawn at any time, for any reason, and usually without tax consequences. Policyholders have the option of leaving the money in their plan and allowing the cash value to accrue.
Employees may change or terminate additional premiums at any time without cost. Policyholders also have the option of making payments via payroll deductions, as well as making any lump-sum deposits in addition to their premiums.
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