Life insurance provides financial solace when the worst tragedies strike. The economic benefits help all bereaved beneficiaries, but they’re especially important to survivors who relied on the deceased’s income. For this reason, many employers choose to offer employees life coverage within their compensation package.
Basic term life insurance generally pays death benefits to named beneficiaries should the policyholder pass away during the policy’s term. Whole life insurance combines death benefits with investing opportunities, but most employers offer only term life coverage.
Many employers across industries might want to improve their employees’ benefits packages by including term life coverage. This is an expected benefit for some professionals, and less-skilled workers likewise often appreciate having access to coverage. For employees who can’t qualify for affordable life policies on their own, group life coverage may be the only way to obtain coverage.
Group life coverage normally covers policyholders as a collective, being underwritten based on the average expected risk of the group as a whole. Group coverage is different than individual coverage that people purchase on their own, and for which high-risk individuals may not qualify.
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The amount of group life coverage employers choose to offer varies. Some employers offer substantial amounts of coverage, while others purchase policies that pay as little as $1,000 per claim.
How much coverage is provided often correlates to employees’ average positions and salary. Lower-wage workers are more likely to have reduced benefits, but these benefits are often particularly important to employees who earn less and frequently live paycheck-to-paycheck.
Employers or employees might pay for group life coverage, and the premiums are frequently split between the parties. In some cases, employees automatically receive some coverage from their employer and have the option to purchase more.
Simply having access to group courage is a valuable benefit to employees who can’t get life coverage on their own. Other employees will only value the benefit if the coverage is partly or fully paid for.
The premiums charged for group life coverage vary, but usually are affordable. Employers have great control over what both they and employees pay, because the amount of coverage can be adjusted so much. Lower amounts of coverage generally correlate to lower premiums.
When evaluating premiums and who pays for them, employers should make sure that whatever premiums employees pay are affordable within the employees’ salaries. An insurance broker who specializes in this type of life coverage can help evaluate premiums for both employers and employees.
Whether employees are required to enroll in group life coverage depends on how an employer sets up the coverage.
When employers solely pay for the policy, employees are often automatically enrolled in the group life coverage. Employees aren’t necessarily required to enroll in the coverage, so much as they’re automatically enrolled since it costs them nothing. Of course, employees should be briefed on the coverage they receive even when they’re automatically enrolled.
For assistance with setting up group life coverage, contact the insurance brokers at QuieTrack Insurance Services. Our brokers are well-versed in many aspects of employee insurance benefits, including group life coverage. We’ll work closely with you to make sure that any group life insurance your business offers fits within your compensation strategy.