There’s no better way to attract and keep quality employees than offering them group life insurance as an employee benefit.
Here’s how these programs work: as the policy owner, you keep the actual policy (known as the “master contract”), while each covered employee receives a certificate of insurance that serves as proof of coverage. Most group policies are written on a term basis, renewable yearly, with the employer paying most – or all – of the premium. As with individual life insurance, your workers have the right to designate or change the beneficiary(ies) at any time.
The amount of coverage is usually one or two times the employee’s annual salary and remains in effect as long as he or she remains employed or until the end of the policy term. Workers who leave have the option of converting the policy to individual life coverage.
Group life offers significant benefits to both your workers and you. Because coverage is written on a group basis, employees don’t need to take a medical exam or provide a detailed health history. This less-stringent underwriting allows workers with minor medical conditions to get insurance for which they might not qualify on an individual basis (or would be far more expensive). Even better, they won’t have to pay all – or any – of the premiums.
As an employer, you can deduct group life premium payments for federal income tax purposes. Offering this benefit will also help strengthen the security and loyalty of your workforce, reducing turnover, which will save you money and time in hiring and training new workers.
As employee professionals, we can advise you on creating and implementing an effective group life insurance program.