Group Life Insurance: Church Employee Benefits Explored

Group life insurance is a common employee benefit that provides a death benefit to the insured's beneficiaries if they pass away while working for an organization. It is usually offered by an employer or another large-scale entity, such as an association or labor organization, to its workers or members. The Church Pension Group, for example, offers group life insurance to active and retired clergy and lay employees. This type of insurance is typically inexpensive and may even be free for certain employees, making it a valuable perk for employees.

Check with your church employer about the specific details of your plan

When it comes to group life insurance for church employees, it's important to recognize that the specific provisions can vary between different churches and dioceses. Therefore, it is essential to consult with your church employer to clarify the details of your particular plan. Here are some key points to consider when checking with your church employer about your group life insurance plan:

Eligibility and Enrollment

Ask your employer about the eligibility criteria for the group life insurance plan. In some cases, active lay employees who are compensated for a minimum number of hours per week, such as 20 hours, may be eligible for coverage. Clarify whether the insurance is provided automatically upon meeting the eligibility requirements or if there is an enrollment process you need to follow.

Coverage Details

Understand the extent of the coverage provided by the group life insurance plan. Inquire about the specific benefits included, such as accidental death and dismemberment insurance or long-term disability coverage. Ask about any limitations or exclusions in the policy, as well as the maximum benefit amount payable.

Supplemental Insurance Options

Some church employers may offer supplemental group life insurance plans in addition to the primary group coverage. Supplemental insurance provides additional protection for employees and their eligible dependents, often at group rates. Inquire about the availability of supplemental insurance, the costs involved, and any conditions or restrictions on purchasing this additional coverage.

Enrollment Periods

Find out if there are specific enrollment periods for the group life insurance plan. In some cases, enrollment may only be available during certain windows, such as when you are initially hired or during periodic open enrollments. Understand the deadlines and any requirements for enrolling, such as completing and submitting the necessary forms.

Plan Administration and Contact Information

Obtain information on how the group life insurance plan is administered. Ask for details on who to contact for further inquiries or assistance, such as a client services team or a specific insurance provider. Understand the process for filing claims or accessing benefits under the plan. Your employer should be able to provide you with the necessary resources and guidance to navigate the insurance plan effectively.

Remember, the information provided by your church employer will be specific to your particular plan and diocese. Taking the time to understand the details of your group life insurance coverage will help you make informed decisions about your financial protection and ensure you can maximize the benefits available to you.

Understand the eligibility criteria for church employees

To understand the eligibility criteria for church employees to access group life insurance, it is important to know that each diocese or institution determines if coverage is available and, if so, the amount of coverage offered. Active lay employees who are compensated for a minimum of 20 hours per week may be eligible for employer-provided group life insurance. This is also known as Group Term Life Insurance.

Accidental Death and Dismemberment Insurance is generally available to active lay employees under the age of 70 who are enrolled in Group Term Life Insurance. The maximum benefit for this insurance pays out up to the full amount of your Group Term Life Insurance benefit.

Supplemental Group Life Insurance is available through Church Life. This can only be selected when an employee is first hired and during periodic open enrolments. It is important to note that an employee and their dependents can only have one supplemental life policy.

The Medical Trust determines the plan's eligibility criteria. Employers or participating groups decide whether active employees are eligible for employer contributions toward coverage, confirm that employees meet the eligibility criteria, and maintain documentation related to member enrollment and elections.

To enrol, eligible individuals and their eligible dependents must be part of a group that participates in the Episcopal Health Plan. Enrolment takes place when a new group joins the Medical Trust, during annual enrolment, or when an individual experiences a significant life event, such as a change in marital status or the birth of a child.

Learn about the different types of group life insurance

Group life insurance is a common employee benefit that provides a death benefit to the insured's beneficiaries if they pass away while part of the organization. It is offered by an employer or another large-scale entity, such as an association or labor organization, to its workers or members. It is typically less expensive than individual life insurance and often comes as part of a larger benefits package.

There are several types of group life insurance:

Group Term Life Insurance

This is the most common type of group life insurance. It provides a death benefit for a specific period, such as 30 years. If your employment ends before that time, your policy will also terminate. This type of policy is usually offered with little to no out-of-pocket cost for the employee.

Group Whole Life Insurance

This is a type of permanent life insurance policy that lasts for the insured's life, assuming premiums are paid. It generates cash value based on a fixed interest rate and may pay dividends. The cash value can be accessed via loans or withdrawals or used to pay premiums.

Group Universal Life Insurance

This type of policy is more expensive but comes with a savings component and premium flexibility. Over time, a group universal life insurance policy gains cash value based on investments, and these savings can be withdrawn. This policy is permanent, as long as premium payments are maintained.

Group Variable Universal Life Insurance

This policy is similar to a universal policy, in that it is permanent and has a savings component. However, it also allows the policyholder to invest some of their savings into interest-bearing subaccounts. The value of these savings may fluctuate with the market, and if the value drops too low, the policyholder may face higher premiums.

Compare the cost of supplemental life insurance through your church to individual policies

Supplemental life insurance is an optional coverage that adds an extra layer of protection on top of the group policy provided by your employer. It is available through employer-provided group life plans and can also be purchased from a private insurer to supplement an employer's basic plan.

If you are a church employee, you can compare the cost of supplemental life insurance through your church to individual policies by following these steps:

• Check your eligibility: Supplemental life insurance is typically available to new employees enrolled in Group Term Life Insurance. In the context of church employees, this could include active clergy and lay employees. Confirm with your employer or diocese to understand the specific details of your plan.
• Understand the coverage offered: Supplemental life insurance provides additional coverage to employees and their eligible dependents. The coverage levels can vary, but typically range from $50,000 to $500,000 for the employee, $30,000 to $240,000 for a spouse or domestic partner, and $10,000 for each eligible child. Coverage is usually reduced by 50% at age 65 and terminates at age 70.
• Compare costs and rates: The cost of supplemental life insurance through your church will depend on the specific plan and the group rates offered. You will typically pay 100% of the premium for this coverage. Compare these rates with individual policies available on the open market, considering your age, health, and specific coverage needs.
• Consider portability: Group life insurance is usually conditional on your employment, but you may be able to convert it to a personal term life policy if you leave your job. Individual policies, on the other hand, are not tied to your employment and can offer more flexibility if you change jobs.
• Evaluate alternative options: In addition to standard term options, your church may offer supplemental whole life insurance policies. Compare these options with laddering term life insurance policies or upgrading with riders, such as accelerated death benefits.
• Review existing coverage: Before opting for supplemental coverage, review your existing policy. Your basic group life insurance may already include accidental death and dismemberment, spouse, or dependent life insurance at no additional cost.

By following these steps, you can make an informed decision about whether to choose supplemental life insurance through your church or explore individual policies that best meet your needs and budget.

Review the pros and cons of group life insurance

Group life insurance is a single contract for life insurance coverage that extends to a group of people. It is usually offered by an employer or another large-scale entity, such as an association or labour organization, to its workers or members.

Pros

• Convenience: Getting coverage through work can be relatively simple. The paperwork is often part of your hiring documents, and HR departments are typically on hand to answer your questions.
• Price: Basic coverage through work is usually free or offered at a low cost for the employee, making it an easy way to get a small amount of coverage.
• Acceptance: Most basic life insurance plans through work are guaranteed, so even people with serious medical conditions can qualify.
• No medical underwriting: Unlike individual policies, group insurance doesn’t require a medical exam.
• Relatively inexpensive: Group life insurance is fairly inexpensive and may even be free since many members pay into the group policy.

Cons

• Coverage is tied to your job: Group life insurance is often not portable, meaning that if you leave your job, you may not be able to take the policy with you.
• Limited choice: Coverage through work tends to be a type of term life insurance, and employers typically only work with one carrier, so you won’t find the range of policy options that you might find outside of work.
• Low coverage amounts: If you have dependents or a lot of financial obligations, a group life insurance policy could leave you underinsured. Coverage amounts are typically capped at low amounts, such as one to two times your annual salary.
• Premiums aren’t fixed: The premiums for group life insurance go up either on an annual basis or every five years.
• Not portable: Once you leave the organization, group life insurance terminates (either immediately or after a short grace period).
• Organization controls the policy: Your employer controls the policy, which means your premiums can increase based on decisions that your employer makes.

Frequently asked questions