This type of life insurance is usually offered to a specific group of people. The coverage will usually pay a benefit if the covered person dies during the time they are covered by the insurance policy. Group term life insurance is often offered as a benefit to employees or by groups, such as unions, as a benefit for their members.

With this kind of insurance, a standard amount of $50,000 in coverage is commonly offered for free, with options for higher amounts sometimes available if paid for. Group term life insurance is usually much cheaper than an individual term life insurance policy. As with other types of term life insurance, the value of the policy will only be paid out in the event of the death of the covered person.

Group term life insurance is the kind normally offered to employees by their employer.

Because the employer pays part of the premium, only a very small amount of money is taken out of the employees' paychecks for their group term policy.

It's called "term" because it ends when the employment ends, although some plans offer an option to continue coverage after termination, but on an individual basis. Also, it's called "term" because these policies terminate usually at a certain age.

The word "group" means that the policy is for the benefit of all employees together in a company. This also ends up creating a cheaper premium paid for the policy, because of the number of employees covered.

Usually there aren't any big medical exam requirements. Instead employees often just designate a beneficiary in the event of their death. The amount of each policy also is normally a consistent across-the-board amount for everyone in the company.

Unlike "whole" life insurance, "term" insurance would have no cash value available for withdrawal or borrowing prior to death of the insured.