What year was it when the first Group Life Insurance for employees was introduced?

(1909, 1911, 1915, 1920)

1911 – Introduction of Employee Group Life Insurance

source: American Council of Life Insurers. Life Insurers Fact Book

Life Insurance is designed to take care of one's dependents after death... but you can't always buy life insurance when you need it. Why? You have to be in reasonably good health to purchase most types of life insurance products.  

It may seem logical to ask: Why can't I get life insurance if I'm dying? Let us look at an example to understand the answer to this question.
 

Say you make $50,000 a year, and have $3,000 in your savings account. You have a $200,000 term life insurance policy that costs you $38.00 per month. [Now if something were to happen to you – your family has $200,000 to live on instead of only the $3,000 in your savings account.] The life insurance company has this $200,000 to give to your family because they have collected $38.00 per month from similar people who did not die, therefore the insurance company can afford to pay the $200,000 to your heirs.
 

Now let us assume a life insurance company sells $200,000 life insurance polices to high risk – terminally ill people. The company realizes the high probability of paying out the $200,000 on many policies. In order for the insurance company to be able to pay out on several $200,000 policies they would need to collect some crazy amount like $50,000 per month from a lot of similar people, knowing that only a few will survive.
 

This example shows: that the more unhealthy the group is … the more the insurance company will need to charge each person in the group.
 

Most life insurance companies do not offer high risk life insurance policies. This is why you need to be reasonably healthy to get a life insurance policy. 
 

This is also why we are so passionate about Life Insurance. It makes my heart ache when someone calls to ask about life insurance for their husband because just received 4 stints in his heart and has diabetes -or- My Aunt needs life insurance because she was just diagnosed with a tumor. Usually (not always) by then it is too late to be accepted by the life insurance company.

Other Helpful Topics:

Sad Fact of Life Insurance

Some is Better Than None

Why do I need Life Insurance?

Guidelines – Why Life Insurance

How to get the Best Insurance Rate

7 things you should know about your employer sponsored life insurance...

1. Coverage Amounts are Minimal.

Although coverage amounts will very from employer to employer, more than likely you will only be offered a minimal coverage amount. Reason being... because employers try to keep their premium costs low while still being able to offer this as a benefit to their employees. This in turn can leave your family and loved ones vulnerable since the coverage amount is usually just enough to cover final expenses and nothing more ... ie: Mortgage, car loan, credit card and medical bills etc. 

2. Not Customized to Your Needs.

When it comes to Life Insurance, every persons needs are as unique as the person themselves. Group plans are geared to the group as a whole and not customized to the individual. Leaving many areas that are uncovered by life insurance. 

3. Not Portable

Employer sponsored Life Insurance can not go with you should you change your place of employment. If you cease working for an employer and do not have a backup policy in place this could be detrimental to you and your family.

4. Benefit Funds are Not Immediate.

In most cases, with employer sponsored life insurance, beneficiaries will not receive the funds for 30 days or more following the insureds death. Private policies typically payout benefits quickly, before the 30 day mark has be reached.

5. No Guarantee.

You are provided with the options that the company you are working for, decides will work for the group as a a whole. Maybe you have an affordable life insurance plan this year but the rate could go up in the following year or canceled altogether. Having a back up policy will ensure you are covered as long as you choose to be, not when your employer chooses. 

6. You may Need More Than Just Term Life Insurance.

Maybe a whole life policy is something that would work best in your situation. Usually Whole Life insurance plans are not offered to you as an option in the group plans.

7. Employee Coverage Only.

With most group life insurance plans you do not have the option to have additional family members covered within the same insurance plan.

Employer sponsored Life Insurance can be a very good thing to have. Especially if your able to receive these benefits at a good premium price or if you are not able to obtain life insurance on your own because of a health problem. See “Some is better than none” post.

Do any of the above statements apply to you? If so... North Coast Life Insurance Company offers a variety of plans that can supplement the coverage your employer provides but does not cover everything that you need it to.

• North Coast – Term Life and Whole Life products feature premiums and death benefits that are guaranteed - (Provided timely premium payments are made per the policy contract).

• The policy is yours and follows you if you change employment or living situation.

• You will be protected whether you are starting a company of your own or between jobs.

• Spouse and additional family member options are available to you.

• Option for premiums to be deducted from your checking account.

Have questions? See more posts under the Life Insurance category on this blog or Try live chat: