Yearly Renewable Group Term Insurance

What Does Yearly Renewable Group Term Insurance Mean?

A Yearly Renewable Group Term Insurance is a life insurance policy that provides coverage for a group of people and is renewed annually. Typically, this type of policy is offered by an employer or another organization, such as a labor union, to its employees or members.

Group term coverage is one of the most common ways people first get a term life insurance policy, since the employer handles enrollment and there is usually little or no medical underwriting.

Insuranceopedia Explains Yearly Renewable Group Term Insurance

As part of a benefits package, an employer often purchases a yearly renewable group term insurance policy for its employees, typically covering most, if not all, of the premiums. Since the premiums are usually much lower, this can be advantageous for employees who lack coverage or sufficient coverage. When you leave your employer, you have the option to convert the policy to an individual one. However, conversion premiums may be higher for comparable individual policies, making it beneficial only if you are otherwise uninsurable.

If you are healthy enough to qualify on your own, it is often cheaper to buy a separate individual policy from one of the best life insurance companies rather than convert your group coverage. Rates for an individual term policy depend on your age, health, and how much coverage you want, so it helps to know the average cost of life insurance before deciding whether to convert or shop around.