What is the primary purpose of group life insurance?

The primary purpose of group life insurance is to provide a death benefit to employees' beneficiaries. This type of insurance is typically offered by employers as part of an employee benefits package. It offers a financial safety net for the families or designated beneficiaries of employees in the event of the employee's death. The death benefit amount is predetermined and is paid out to the beneficiaries, helping to alleviate financial burdens at a difficult time.

In contrast, while income replacement, covering dependent expenses, and paying for funeral costs are important considerations associated with life insurance in general, they are not the primary focus of group life insurance. Instead, the main objective is to ensure that a lump sum benefit is available to the beneficiaries named by the employees, thus providing immediate financial assistance upon the insured individual’s death. This focus on providing a clear and direct benefit to beneficiaries distinctively highlights the role of group life insurance in supporting employees and their families.