Usually you get group life insurance coverage through an employer. But some trade associations also offer access to group life insurance policies to their members.

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Many employers offer group life insurance as a benefit, paying 100 percent of the premiums or allowing workers to purchase life insurance through the company's benefit plan voluntarily. When offered as a benefit, group life coverage through an employer typically equals about a year's salary. Some companies offer a flat face amount, which depends on your position – the higher you rank in the company, the more life insurance for which you're eligible.

An employer policy that you buy voluntarily often is more extensive than a policy offered as a benefit. Some employers even offer whole life insurance, which protects your loved ones until you die.

Group life insurance through an employer is affordable because the insurer assumes most people in the group won't stay with the company until they retire. As a result, the life insurance term is relatively short, and the rate is based on the average risk of the group, rather than on a single person.

Who qualifies for group life insurance?

You qualify for group life insurance without a medical exam unless you list a severe health problem on a questionnaire when applying for the coverage.

If you're eligible for group life coverage through an association, evaluate the policy carefully and compare it to coverage you could buy on the individual market. If you're in good health, you might find more affordable coverage with an individual life insurance policy.

Although group life insurance is a nice bonus, particularly when the employer pays the premium, you shouldn't consider it a replacement for individual life insurance. Group life policies typically don't provide the amount of coverage needed to take care of loved ones, particularly if you're the primary breadwinner.

Also, you may lose your coverage when you leave the company. In some cases you might be able to maintain the coverage, but it will cost you more in premiums, and if the employer switches plans or cancels the policy, you will lose the coverage.

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