Natural Groups

In order to qualify for a group life insurance policy, the group must be what is known as a “natural” group. In other words, the group members must share a formal connection other than the insurance itself. The group cannot be organized strictly for the purpose of obtaining group insurance. For example, a group of neighbors cannot form an association simply to qualify for group insurance.

Crocker Life – Serving Greenville, Anderson, Spartanburg, and Oconee Counties

Types of Plan Sponsors

Some typical examples of group sponsors are employers who wish to offer plans as employee benefits, associations, labor unions, multiple employer trusts, and multiple employer welfare arrangements.

Employers

By far the most common type of group insurance plan sponsors are employers. They can either set themselves up as the trustees of a group plan for their employees or sponsor it themselves.

In most states, a minimum of 10 employees is required to set up a group insurance plan, though some states allow plans with fewer employees.

 

Individual discrimination in employee coverage is prohibited. All eligible employees must be allowed to participate.