Who owns a group life insurance contract?

In a group life insurance contract, the ownership typically resides with the employer. This structure is designed to provide coverage for a group of individuals, often employees, under a single policy. The employer signs the policy and is responsible for its administration, which includes making premium payments and managing the overall plan structure.

The reason this ownership structure exists is tied to the purpose and benefits of group insurance. Employers often provide these policies as part of employee benefits packages, enhancing employee satisfaction and helping to attract and retain talent. Additionally, group policies generally allow for lower premiums because they spread the risk across a larger group of insured individuals.

While the insured employees benefit from the coverage, they do not own the policy. Instead, they are the beneficiaries of the employer-owned contract. The relationships between the employer, the insured employees, and the insurance provider are defined by the terms of the group policy, which outlines coverage details, benefits, and eligibility criteria.