How does it work?
If your employer offers group life insurance benefits, you can usually enroll when you're hired. If you don't (or you want to make changes), you generally can do so during an annual open enrollment period or after a life event such as marriage or a new baby. If you're a veteran, member of a union like the National Education Association (NEA) Opens in new window or belong to a group like AAA Opens in new window or AARP Opens in new window, look into your coverage options.
For employer plans, beyond the (usually) free coverage of a year's salary (more if you work for the federal government), you often can add extra coverage based on your pay. For example, if you earn $40,000 a year, you may be able to choose coverage in $40,000 increments (e.g., $80,000, $120,000 and so on). You might need to answer medical questions or even take an exam to buy more, but you won't be charged for the hassle.
Once you're insured, if you die while covered, your beneficiaries receive a death benefit equal to your coverage amount.
Note that if you get a policy through your employer, it may be taxable: According to the IRS Opens in new window, the first $50,000 of group term coverage isn't taxed, but premiums for coverage above $50,000 are considered taxable fringe benefits—they may face Social Security and Medicare taxes (withheld from your paycheck) and income taxes when you file your annual federal return.
Make the right choices
Because it's often more affordable than individual insurance, a group term life policy may be worth the price even if you have coverage on your own. Whatever you do, don't simply ignore an opportunity to enroll through work or an organization. It isn't a perfect solution for everyone, but consider it an option for helping protect those you care about most. Hopefully, you'll never use any life insurance, but if something does happen to you, the coverage can help maintain your family's home and lifestyle into the future.