Business group life insurance is one that protects business employees. It may appear together or not with the group personal accident policy.
Whoever contracts this type of insurance is the legal entity employer, called the stipulate, with the insurance company to ensure its workers and respective beneficiaries’ financial protection. The extent of these group benefits can extend to spouses and descendants.
When there is an unexpected death of the family member who is the primary (or only) breadwinner, either due to an accidental cause or a severe change in the state of health, it is very common for the standard of living of the person who stayed to fall. For this reason, the life insurance indemnity process is a safeguard for some years, allowing family members to restructure the finances of the home.
The group life insurance is structured based on the financial distribution system, in which the reserve is formed by the group of policyholders of a particular insurance company. The premium paid by each policyholder of the same type of policy over a specific time is used to settle financial obligations. This includes each claim claimed during the same period.
WHEN IS LIFE INSURANCE MANDATORY?
Employment relationship does not indicate the employer’s obligation to provide life insurance for its employees. However, this does not mean that every business type is exempt from offering this benefit to its professionals. Some categories guarantee this right through their group agreements.
Find out which are the categories that have the mandatory life insurance contract:
- Fuel station;
- condominium (all employees);
- bread making;
- Retail food trade;
- restaurant and bar;
- educational (teachers and other professionals);
- forwarding agent;
- moto boy;
- Service provider;
- pottery, clay porcelain, and ceramics industry;
- bakery and confectionery industry;
- textile industry.
The company’s management needs to be attentive to these conventions’ rules not to suffer lawsuits.
HOW TO HIRE GROUP LIFE INSURANCE?
There is usually a limitation on the number of employees an organization needs to access the group life insurance policy. The insurer determines this; that is, it is variable. There are cases in which the company only closes deals with groups over ten lives.
In others, the greater the number of policyholders, the better the payment terms. So, do some research to find the one that meets the specific needs of your business.
There are the minimum and maximum age for the inclusion of workers in the business life insurance contract, ranging from 14 to 65 years. Other requirements imposed for this type of insurance are that the beneficiaries present satisfactory health conditions and are in full professional activity.
It is up to the insurer to define the regulation for new policyholders to be included in group life insurance. Therefore, be careful when reading your contractual draft before signing it, as this is the official document that establishes all the rules of the protections acquired.
Policyholders need to notify their employer if they have any pre-existing illness, as this may impact different coverage from other workers.