Benefits of Group Life Insurance
Life insurance is an important benefit to offer your employees. It helps give employees a sense of security that their loved ones will be protected with some financial coverage in their greatest time of need. Group life insurance also has rewards for the employer as employees who have peace of mind are more apt to focus on their work and demonstrate productivity. Group life insurance subsidized premiums also are tax-deductible for employers. Additionally, offering group life insurance as part of a comprehensive benefits package allows employers to attract top talent among the work force.
Group Life Insurance plans are attractive to employees as a good value.
For employees, group life insurance provides a convenient way to obtain life insurance coverage at group rates that are often more affordable than they could purchase on their own, making it a good value. Another benefit is that employees may not be required to go through underwriting as they may be automatically covered under certain group life insurance policies. Should the policy be needed, family members will receive a tax-free death benefit.
Help for employees in their greatest time of need.
Life insurance funds can be used to pay essential expenses like a mortgage payment, utility bills, groceries, tuition and expenses for children’s college, funeral arrangements and more. Certain permanent policies may be set up to cover other financial situations such as estate taxes, if a more complex policy is recommended.
A variety of plan options tailored to your needs.
At Key Health, we offer several options for group life Insurance to meet the needs of your business. We are not limited to one carrier and can research the best rates and benefits from the top industry providers to meet your specific goals. Our knowledgeable, licensed agents will help you determine just the right policy for your employees. You can direct the coverage amount and even create a tiered plan, if desired, to offer higher coverage for executives than hourly employees.
Types of Group Life Insurance
Term Life – Term life plans are for a designated period of time such as 10, 20, 30 or more years. Term life is typically the most affordable and popular option with premiums ranging from about $20 to $30 per month. This plan can be set up to be fully employer paid, fully employee paid or partly employer subsidized.
Pro: Low monthly cost. Cons: Set term. No cash value.
Permanent Life – Group life insurance coverage is tied to employment. If an employee leaves, the coverage ceases. However, the employee may be able to convert the policy to a permanent policy. Whole life and universal life are two types of permanent policies.
Pro: No expiration date. Cash value. Cons: Higher premiums than term life. May include additional fees.
Whole Life – This policy covers a person for their lifetime from the point of purchase. This type of plan includes an investment component where a portion of the premium is put into a high-interest bank account or investment account. This type of permanent insurance can include a tax-deferred cash value. Employees may borrow against the policy once a minimum cash value is achieved or cash the policy out; although it is advised to keep the policy as long as the insured lives. Annual dividends also are attractive allowing the insured to receive dividends in cash, have them accumulate interest or apply them to reduce their part of the premium.
Pro: No expiration date. Cash value. Cons: Premiums 5-15 times more than term. Policy may include additional fees. Accrual amount dependent on current interest rates.
Universal Life – This adjustable policy offers the insured the flexibility to change the coverage death benefit amount as well as flexible payment options throughout the policy within certain restrictions. This policy also is linked to an investment account allowing the employee to accrue tax-deferred interest.
Pro: No expiration date. Cash value. Cons: Higher premium costs than term. Accrual amount dependent on current interest rates.
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