Group Life insurance benefits fall into the following three categories:

Basic Life Insurance
Optional Life Insurance
Dependent Life Insurance

Basic Life Insurance

Basic life insurance pays a lump-sum tax-free benefit in the event of an employee’s death. The amount is pre-determined at the beginning of the group contract and usually falls into two categories, a flat benefit such as $25,000 or a multiple of earnings benefit such as 2x annual earnings to a specified maximum.  Employers can choose to have different benefit schedules for different classes of employees. For example, a "management" class could have a multiple of earnings benefit whereas the “employees" class could have a flat benefit of $25,000.

Life insurance rates are based on the demographics of the group including age, gender, and occupation and once a contract is placed, benefits are yearly renewable term, adjusting with the changing demographics of the group.

The most common reasons for getting group insurance as opposed to individual insurance are that the rates are much more affordable due to a spread of the risk and the fact that benefits are guaranteed issue.  For individual coverage, people are required to have their doctors fill out medical evidence forms so quite often, if there’s a history of medical issues, and person could easily be declined for coverage.  With group coverage, all employees are guaranteed a certain amount of coverage without any medical evidence (this is referred to as a non-evidence maximum and it could be as such as $75,000 for a group with three employees!)  Generally, higher non-evidence maximums are available to larger groups and to groups considered to be lesser risk.
If the group life insurance coverage terminates for an employee because employment or membership in the plan terminates or because he or she no longer qualifies for coverage, the plan can be converted into an individual policy. The application to convert coverage must be received by the insurer within 31 days of termination of the employee's insurance.