Group life insurance is an important benefit to offer your employees. Statistics continue to show that for a majority of American workers, the only life insurance coverage they have is what they are provided through their employer.
How Does Group Life Insurance Work?
With group life insurance, the employer purchasing the policy retains the master contract. Employees may not be required to pay anything out of pocket to receive policy benefits, or they may have a portion of the premium deducted from their paycheck depending on how the program is structured. Most often, the employer will offer a base amount of coverage at no cost to the employee. The life insurance (death benefit) amount can be a flat amount of coverage for all employees, a scheduled flat amount for each employee based on job class title or length of service, or a percentage of the employee’s annual salary.
Types of Group Life Insurance
Employers have a variety of options when selecting a group life insurance plan. Types of group life insurance plans include:
- Group Term Life: This is the most common type of group life contract plan where all or most of the premiums are paid for by the employer.
- Group Voluntary Life: The second most common type of group life contract where all the premiums are paid for by the employees. Can be offered stand alone or in conjunction with a group term life plan.
- Group Voluntary Universal Life: An affordable premium plan paid for by employees like pure term insurance, but the plans also accumulate cash values.
Cost of Group Life Insurance
The cost of the premiums will depend on several factors, including, coverage amounts, type and location of the business, number of employees, employee gender, employee age, and the type of plan offered.
Reese Insurance Group will help you design a group life insurance program that offers the most favorable benefits for your employees at the cost structure that fits your budget.