Glossary

Group life insurance

Coverage issued under one master contract to members of a group, usually employees, often at one or two times salary with little or no underwriting.

Also called: group term life, employer life insurance, GTL

Group life insurance covers many people under a single master policy held by an employer, union or association. Members receive a certificate rather than their own policy. At work, basic coverage is often employer-paid and set at a flat amount or a multiple of salary, such as one or two times pay. Employees can usually buy supplemental coverage on themselves and family members.

Underwriting is light because the group exists for reasons other than buying insurance. Basic amounts are typically guaranteed issue, while larger supplemental amounts may require evidence of insurability. Tax rules matter: under IRC Section 79, the cost of employer-paid group-term coverage above $50,000 is taxable imputed income to the employee. Most private employer plans are also governed by ERISA, which affects how claims and beneficiary disputes are handled.

The main pitfall is portability. Coverage usually ends when you leave the job, though you may be able to convert to an individual policy or port the group coverage, often at higher rates. Group amounts can also fall well short of what a family needs. See employer group life insurance: what it really covers for what it really covers.

Last reviewed October 4, 2026

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Related terms

Imputed income The taxable value the IRS assigns to employer-paid group-term life insurance above $50,000, added to your W-2 wages though you receive no cash. Voluntary life insurance Group life coverage offered through an employer that employees choose to buy and pay for themselves, usually by payroll deduction. Conversion privilege A term policy feature that lets the owner switch to permanent coverage with the same insurer without new medical underwriting, within set deadlines. ERISA The 1974 federal law governing most private employer benefit plans, including group life insurance, which sets claim procedures and overrides many state laws. Dependent coverage Life insurance on a spouse, domestic partner or children, added through an employer plan or a rider, that pays the employee if a covered dependent dies. Evidence of insurability Health and other information an insurer requires to approve coverage, such as medical questions, records or an exam, often for amounts above guaranteed issue.

Related guides

AARP life insurance: how the New York Life program works AARP does not insure anyone. New York Life issues the term, permanent and guaranteed acceptance policies sold to members. What they offer and the catches. Affordable life insurance on a tight budget Protect your family when money is short: start with level term, cover the biggest risks first, use work coverage and skip costly products. Association and credit union life insurance Life insurance offered through alumni groups, professional associations and credit unions: how it works, what to check before joining, and how to compare it. Declined for life insurance? What to do next Why insurers decline life insurance applications, how to get the reasons and your MIB file, and what coverage remains: other carriers, rated, simplified, group. Dependent life insurance through an employer Employer dependent life covers a spouse and children in small amounts for a low price. What it pays, how the $2,000 tax rule works, and its limits. Do I need life insurance? A plain test You need life insurance if someone would struggle financially after your death. A five-question test, who can usually skip it, and what to do next.

Related insurers

Aflac The supplemental insurer known for its duck; sells term, whole and final expense life mainly at the workplace, alongside cancer, accident and hospital plans. Boston Mutual Life Canton, Massachusetts mutual founded in 1891, selling whole life, group term and accident coverage at the workplace and through general agencies. MetLife A leading U.S. group benefits insurer; it sells life coverage through employers and services older individual policies it no longer markets. New York Life The largest U.S. mutual life insurer, sold through career agents; it also runs the AARP life insurance program and the former Cigna group life business. Principal Financial Group Des Moines insurer that quit selling life insurance to retail consumers in 2021; it now sells to business owners and executives and services older policies. Prudential Newark-based public insurer (NYSE: PRU) founded in 1875, selling term, universal, indexed and variable life through advisors, brokers and online.

Related tools

Is my life insurance through work enough? Compares your workplace life insurance and personal policies with what your family needs, and shows what would remain if you left your job. Imputed income calculator for group life over $50,000 Applies the IRS Table I rates to employer-paid group-term life coverage above $50,000 to estimate the taxable income added to your W-2.