6.3 Eligible Groups
Typically, any type of group is eligible to purchase a group life insurance policy (referred to as natural groups) - any group that is not formulated for insurance coverage purposes alone. New employees are usually subject to a probationary period before being eligible to enroll, which is typically anywhere from one to six months. After the probationary period, the enrollment period begins in which the employee has usually 31 days in which to enroll. If the employee decides to enroll once the enrollment period has expired, he/she may be required to provide proof of insurability.
Under a group policy, the group as a whole must qualify for coverage, not each individual. The employer as the policyowner determines the amount of coverage to be provided. The insurer, however, has the option to require a certain amount of employee participation before issuing coverage.
Insurable groups typically fall into one of the following categories.
- Single-employer groups
- Multiple-employer groups
- Labor unions
- Trade associations
- Creditor/debtor groups
- Fraternal organizations
Many states place minimum guidelines on the amount of participants required to be considered for group coverage (typically 50). Florida does not set such rules. There is no minimum number of members (lives) as long as the organization is one that is eligible for group life insurance in Florida.
How Benefits Are Determined
Benefits are determined by the policyowner (usually the employer). Every company develops its own strategies for coverage; typically benefits are determined by:
- earnings schedules;
- position within the company; or
- a flat benefit available to all participants.
