Best Group Term Life Insurance Companies
There are more than 800 life insurance companies in the industry and finding the best group term life insurance companies for your small business can be overwhelming. Figuring out who offers the best group life insurance is not always easy. While you can get quotes from all of the top rated life insurance companies, you may never know if you’re choosing the best policy at the best price for your employees.
Since we work with dozens of the top rated life insurance companies, we can help take the mystery out of finding the best term life company for your business. The biggest benefit to representing multiple carriers is that we can find the best company for you based on your specific business needs. Here are the top 10 group life insurance companies which we feel are best in the business.
What’s New For 2023?
MetLife maintained it’s group term life insurance dominance with a 23.1% market share. The company has a double digit lead on its closest competitor, Prudential life which kept the #2 spot for 2023.
Nationwide jumped up from 9th place to #4 this year with a 7.1% market share knocking Securian life down to 5th place. Guardian life makes its debut as one of the top 10 Group Term Life companies coming in at # 10 this year, sending Sun Life out to pasture.
Who Are The Best Group Life Insurance Companies?
Our list of best group term life insurance companies can change at any given time depending on which companies are currently offering the best products and pricing. Click the links below to jump to the companies that offer the best group term life insurance rates:
According to a MetLife Employee Benefit Survey, many employees fail to take advantage of employer sponsored benefits because they don’t understand the importance these benefits. Most employees admit that they spend more time choosing a Netflix episode than making selections during open enrollment.
This leads to employees overlooking important benefits, like group life insurance which can help protect employees from a serious financial loss. LIMRA (Life Insurance Marketing and Research Association) points out that almost half of Americans would struggle financially if a wage earner died unexpectedly.
This is where group term life insurance becomes a most important benefit. For a mere few dollars a month being withdrawn from their paychecks, employees can have vital life insurance protection that can protect their loved ones.
What is Group Term Life Insurance?
Group term life insurance is a benefit offered by employers to help employees have easy access to life insurance coverage. It is a single contract or policy that covers an entire group of employees and is often provided in addition to other group benefits such as group health insurance, dental insurance and disability insurance.
Group life is normally offered to the employee free of charge and a standard maximum death benefit of 1X salary or up to $50,000 of death benefit. Policies are offered on a guaranteed issue basis, meaning no medical exam is required from any of the employees who will be insured.
How Does Group Term Life Insurance Work?
Term life insurance is the most common form of group life insurance however, some employers do offer group whole life or group universal life programs as well. Term insurance is temporary coverage and eventually expires when the term is over. In a business situation, group life covers an employee up to age 65, then the death benefit decreases each year up to age 70.
Most insurance providers will not offer coverage to any employee over 70. The reason for this is simple; most group policies do not require medical background checks so insurance companies feel offering life insurance coverage to older employees without a medical history review is risky business.
Typically, an employer that offers $50,000 of coverage at no charge to the employee can expect to pay a life rate per $1000 of .026 to .055 per month per employee. Premium costs also depend on the industry you are in, the number of employees, their ages and their genders.
If your employees want more than $50,000 of coverage you can add voluntary group life or supplemental group life, which allows employees to buy more coverage at their own expense. However, depending on the insurance company and the amount of death benefit being offered, your employees may have to submit to a medical exam or answer medical questions to qualify.
Supplemental or Voluntary Group Term Life Insurance
Supplemental life insurance is paid by the employee and allows employees to purchase additional coverage. Employees can buy more coverage in multiples of their annual salary up to a maximum amount being offered by the insurance carrier.
Spousal coverage is also available and paid for by the employee. Most group life providers will not offer more than $100,000 coverage for a spouse and $500,000 for the employee since insurers do not collect health risk data from everyone under the policy.
Is Group Term Life Insurance Taxable?
According to the IRS; IRC section 79 provides an exclusion for the first $50,000 of group-term life provided under a policy carried directly or indirectly by an employer. There are no tax consequences if the total amount of such policies does not exceed $50,000. The imputed cost of coverage in excess of $50,000 must be included in income. Using the IRS Premium Table, excess coverage amounts are subject to social security and Medicare taxes.
Should You Offer A Group Life Insurance Program?
According to LIMRA (Life Insurance Research and Marketing Association), group life insurance covers more than 45% of the U.S. population. If it weren’t for group life policies, most Americans would have no life insurance coverage at all. A group life program along with other available benefits are widely sought after by many employees. Group benefits help employers to attract and retain the highest caliber of candidates for employment.
Group health insurance and a retirement program are the top 2 requested benefits requested by many employees. Life insurance is also one of the most requested benefits. For a business owner to keep their benefits package competitive, it’s important to include life insurance.
Best Group Term Life Insurance Companies
As an employer, you will probably find most insurance carriers that offer group health or group dental plans, also offer a group life insurance program. The number of companies participating in the arena is exhaustive. However, there are a handful of group life providers that stand out among the crowd.
The following list is in no particular order but they are some of the best group life insurance companies to consider.
How We Rate The Top Group Life Insurance Companies
Customer Service: Many business owners are too busy running their business and don’t have time to deal with servicing or billing problems. Insurance companies that do not provide excellent customer service did not make the list.
Financial Ratings: The financial strength of an insurance company should always be considered when looking for any type of insurance. It’s important that the company will be able to pay claims and be in business for the long term. The rating agencies we follow are:
A.M. Best: Provides objective opinion regarding an insurer’s, issuer’s, or financial obligation’s relative creditworthiness. Their top rating is A++ – Superior
Standard and Poors (S&P): Measures the credit quality of an insurer and the ability to meet their financial obligations. Top rating is AAA – Extremely Strong
Moodys: Provides opinion of future creditworthiness of an insurers ability to pay claims in relation to the investments and current book of business. Top rating is Aaa – Highest
Fitch: Fitch credit ratings provide an opinion on the relative ability of a company to meet their financial commitments, such as interest, repayment of principal, and insurance claims. Fitch’s’ highest rating is AAA – Exceptionally Strong
Competitive Pricing: While financial stability is essential, competitive pricing is just as important. You don’t want to pay more to one company when another company is offering the same coverage at a lower price.
The Best Group Term Life Insurance Providers
MetLife is a leader in the group benefits field. They are one of oldest and largest life insurance companies in the world and holds a 23.1% total market share of all group life insurance policies in force. They specialize in the large group marketplace for companies with more than 100 employees.
The company provides group insurance options to smaller businesses as well, but you must have at least 5 employees to qualify for their group life plan. Their policy pricing is competitive but it is not the lowest.
MetLife offers basic group term life and group basic group whole life. Additional coverage includes: supplemental life, dependent life, Voluntary Retiree Life and accidental death and dismemberment (AD&D). MetLife makes our list for financial strength and a vast array of group life options.
MetLife Financial Ratings:
A.M Best rating – A+
Moody’s rating – Aa3
Fitch rating – AA-
S&P rating – AA-
New York Life is America’s largest mutual insurance company and shot up to #2 on our best group term life insurance companies last year when they acquired Cigna’s group life, accident and disability insurance business.
The company is also the 3rd largest insurance company by revenue and is over 175 years old. New York Life holds 9.4% of the group term life market and provides group benefits to mostly large employers with over 500 employees.
New York Life offers term life and universal life through their Group Benefit Solutions division (NYL GBS). Their financial ratings are among the highest in the industry:
A.M. Best – A++
Moody’s – Aaa
Fitch – AAA
Standard & Poor’s – AA+
Prudential is one of the best-known insurance companies in the world (The Rock). The company has a 9.3% market share of the group life insurance field making them number 3. Founded in 1875 it has over 100 years experience in the group marketplace and insures more than 20 million people.
Prudential offers basic employer-paid and employee paid term Life, whole and universal life as well as:
Spousal and Dependent Term Life
Waiver of Premium
Conversion to permanent insurance
Accelerated Death Benefit
With very high financial ratings and very competitive pricing, Prudential is one of the best group life insurance companies in the business.
Prudential Insurance Financial Ratings:
A.M Best– A+
Moody’s – A1
Nationwide is mostly known for being a leader in the auto and home insurance market. However, over the last 90 years they have grown to one of the largest insurance and financial service companies in the world. The company comes in 4th place of our best group term life insurance companies with a market share of 7.1%
Nationwide offers an array of group benefits including term life, universal life, whole life and variable life as well as business insurance policies. They work with companies of all sizes and serve more than 500,000 small businesses across the Nation.
Financial Strength Ratings for Nationwide
A.M. Best – (A+)
Standard & Poor’s – (A+)
Securian is the 9th largest insurance company in America and moved down to position 5 with 6.8% of the best group term life insurance companies. The company is owned by Minnesota Life and headquartered in St. Paul, Minnesota. Securian has been providing group benefit solutions since 1917. They offer group term life and group universal life to employers with over 1000 employees.
Group Life Product features include:
Accidental Death & Dismemberment (AD&D)
Waiver of Premium during a disability
Portable Life Insurance if you leave your employer
Conversion to permanent life such as whole life and guaranteed universal life (GUL)
Financial Strength Ratings for Securian
A.M. Best – (A+)
Fitch – (AA)
Standard & Poor’s – (AA-)
The Hartford Life Insurance Company is part of The Hartford Financial Services Group, which was established in 1810. The company comes is number 5 with a market share of 5.2%. Hartford is one of the world’s largest insurance and investment companies and has been providing group benefits for more than 60 years and protects the lives of over 12 million people. They offer a full line of flexible group life options but most notably they are probably one of the most competitive when it comes to pricing.
Hartford’s Financial Ratings:
A.M Best – A-
Moody’s – Baa2
S&P – BBB+
The company was founded in 1848 under the name of Union National. Throughout it’s history, there would be many mergers and acquisitions of prominent insurance companies, such as; Paul Revere life insurance company, Provident insurance and Colonial Life. In 1924, the company became the first in the industry to offer group life insurance and in 1986, Union National became Unum, the name we are most familiar with today.
Unum is a major player in the arena of group benefits and offers many types of insurance coverage to employers such as; Critical illness, Accident & Hospital indemnity, Dental, Vision, disability, Long term care and group life insurance.
Group term insurance and group whole life insurance are available in Unum’s group life program. The company has a total market share of 4.4% of group life insurance policies inforce.
Unum’s Plan features include:
- Spouse and family coverage
- A “living benefit” if a covered individual is diagnosed with a terminal illness
- Accidental death & dismemberment
- Long term care coverage
- A waiver of premium benefit
- Guaranteed issue amount for basic coverage with no health questions or physical exams.
Unum Life Insurance Financial Ratings
Standard & Poor’s – A
Fitch – A
A.M. Best – A
Moody’s – A2
Lincoln Financial was founded in 1905 and the company specializes in financial services, individual insurance and is one of the top providers of group life insurance in the industry. The company holds a 3.9% total market share of the group life insurance industry. They are not the largest provider but they are a very solid financial insurance company.
Lincoln Financial offers a wide range of group life benefits and their pricing is very competitive. Some notable options of their program are:
Waiver of Premium
Accelerated Death Benefit
Portability lets employees keep their coverage, even if they leave their company.
Conversion privilege to permanent insurance without Evidence of Insurability (EOI).
Lincoln Financials’ Ratings:
A.M Best – A+
Moody’s – A1
S&P – AA-
Fitch – A+
Standard Life, is headquartered in Utah. The company is now part of the Country’s largest insurance companies – Manhattan Life. and holds a 2.8% share of group life insurance policies. Along with providing life insurance, the company offers a full array of additional benefits such as disability, dental, vision, accidental life and dismemberment and retirement services.
Here are the key features of a Standard life insurance policy:
- Flexible plans to fit business need
- Benefits during a terminal illness — employees can apply to receive a portion of Life insurance funds early
- Portable coverage — employees who qualify can buy coverage from The Standard if they leave their jobs
- Help if totally disabled — employees may qualify for a waiver of Life insurance premium for a specific time period
- AD&D benefits for families — if an employee dies due to a covered accident, family members may be eligible for Higher Education, Child Care or Career Adjustment benefits
The Standard’s Financial Ratings:
S&P – A+
Moody’s – A1
A.M. Best – A
Guardian is mutual company which was founded in 1860. The company is located in New York City and is a new comer to the largest group term insurance companies with 1.9% market share. Guardian is one of the highest financially rated companies in the industry. They also provide individual life insurance. Investment management, disability, and retirement planning.
Guardian’s Financial Ratings
A.M. Best – A++
S&P – AA+
Moodys – AA1
Group Term Life Insurance Quotes For Your Small Business
If your small business is looking for group life insurance quotes, we can help. We represent more than 35 insurance companies and can provide you with competitive pricing from the insurance companies on this page and many more.
We can help you compare pricing, benefits and features side by side so you can make an educated decision about which carrier would be the best fit for your business as well as your employees. Just call our office at: 800-234-3702
Market share data provided by Insurance Information Institute.