Group life insurance

What it means

Group coverage is usually a benefit of membership: the employer holds the master policy and each covered person has a certificate rather than their own policy document.

It frequently ends, or shrinks sharply, when employment ends — though there may be a right to convert it to an individual policy within a short window after leaving.

Because there is no policy document at home, families often do not know it exists.

Why it matters

It is the most commonly missed life insurance after a death. Nothing arrives in the post, and the last employer may be several jobs ago.

Retirees are often still covered at a reduced amount without anyone remembering, which is why old employers are worth asking.

When you are likely to meet it

• When searching for life insurance after a death.
• When a parent retires or changes jobs.
• When reviewing what an employer's benefits actually include.

Related terms

• Accelerated death benefitA payment from a life insurance policy to the insured person while they are still alive, when they are terminally or chronically ill.
• Beneficiary designationA named person on an account or policy who receives it directly on death, without it passing through the will or probate.
• Cash surrender valueWhat a permanent life insurance policy is worth if it is cashed in during the insured person's lifetime.
• Contestability periodThe window, usually two years, in which a life insurer may investigate and rescind a policy.
• Death Master FileA federal record of reported deaths, used by insurers and institutions to identify account holders who have died.
• Federal retirement benefitsThe pension and insurance system for federal civilian employees — FERS or the older CSRS, plus group life cover, each with its own beneficiary record.
• Lapsed policyA life insurance policy that has ended because premiums were not paid — sometimes without anybody realizing.
• Life policy locatorA free search service run by the insurance regulators, which asks participating insurers whether a person held a policy.
• Retained asset accountAn account an insurer opens in the beneficiary's name instead of sending a check, holding the life insurance proceeds until they are drawn.
• Unclaimed propertyMoney and accounts a business has lost touch with the owner of, turned over to a state which then holds it indefinitely.

Sahvelo guidance that uses this

• Finding life insurance
• Life insurance