The explanation of a policy that provides a death benefit to a beneficiary if the insured individual dies during a specified period, where the coverage is offered to a group of individuals, such as employees of a company or members of an organization. An illustration would be an employer providing life insurance as part of their benefits package, with coverage lasting for the duration of employment.
Understanding the concept is crucial for both employers and employees. For employers, it represents a valuable tool for attracting and retaining talent, boosting morale and productivity. For employees, it offers a safety net for their families at a potentially lower cost than individual policies, due to the risk being spread across a larger pool of insured individuals. Group life insurance has evolved significantly over time, becoming a standard component of many employee benefit programs in developed economies.