Business Life Insurance
Definition - What does Business Life Insurance mean?
Business life insurance is purchased by the employer for its employees. Commonly, the beneficiary of the life insurance is the whole group. So, it is likewise known as a group life insurance policy. It is available for large organizations. By buying the insurance coverage in bulk, this type of life insurance benefits its members as they do not need to pay expensive premiums on a monthly basis compared when they buy individual policies.
Insuranceopedia explains Business Life Insurance
When employers purchase this coverage from a provider for its employees and members, they have to pay a certain amount of the monthly premium. The rest will be paid by the employee. Moreover, the employer keeps the master contract and the employees are given a certificate of insurance. The employees or their beneficiaries can use the certificate in the event that they need to make a claim. There are downsides to business life insurance policies. First, coverage is discontinued if the employee leaves the company. Second, when it comes to individual coverage, employees have little control and may need to pay for additional coverage not integrated into the group life insurance. Third, if you are a healthy or low-risk individual, you pay the same premium as your high-risk co-worker. The advantage in getting a group life insurance is that high-risk individuals are eligible to get insurance at a lower cost.