Group Life Insurance For Small Businesses:

If your employees are looking for more benefits, you may want to consider adding a group life insurance benefit rider for them, or an entire group health life policy. It is important to understand the alternatives for a group life insurance policy before you select a plan.

Term Life Insurance

Term life insurance is a policy that provides life insurance coverage for a specific amount of time. If an employee does not collect benefits during that time period, the policy will expire. This is a type of life insurance policy that is typically utilized by employees with families or dependents that are going through school and need a little more stability if something should happen to them during this time period.

Term life insurance is also typically used by an employer who is interested in providing some type of group life coverage for their employees. It is selected because the term life coverage will only last while your employee is still working for you. Once they leave your company, their term life insurance coverage will expire.

Permanent Life Insurance

This type of life coverage is not typically used by small businesses, but it is an option if you would like to offer an extra level of protection for your employees. Permanent life insurance will cover an employee until they die or until they cancel their policy. This type of life insurance can be used for many different things as your employees age, such as providing assistance for long-term care by cashing in a policy.

A provider for group life insurance will typically set a minimum amount of coverage for your employees. This amount is typically $10,000 per year. However, many businesses that offer high salaries will usually offer the amount of salary as a benefit. This will ensure that the employee's dependents are taken care of in the event that the employee dies.

Your employees will be able to increase their amount of coverage up to four times in many cases, but they will need to bear the burden of this extra coverage if they elect to go this route. Otherwise, it is usually the employer that will pay the premiums for group life insurance.

When an employee leaves your company, as mentioned above, normally their group life coverage will expire. However, some states do require that employers give the option of keeping this coverage to their employees. You will need to check with your state's insurance board if you are not sure of your state's regulations.

The cost for group life insurance is typically low, depending on the selected level of coverage. An average cost is 10 to 25 cents per $1000 of coverage. For example, a policy that offers a $10,000 life insurance benefit, your premiums would range from $1 to $2.50. This is per employee. Your life insurance provider will typically request that all premiums for all of your employees be paid in one lump sum. If you have 20 employees, this means that you would need to pay $20 to $50 each month for the monthly premium on your group health coverage.

This is a very low premium and can offer an added benefit package to your employees. Group life insurance coverage is typically a low-cost way to enhance your company's appeal to current and new employees.

<< Back