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Group life insurance has long been a staple of employee benefit packages. Employees want it because it can ease worries they have about leaving family members financially unstable after they die. Employers like to offer it because it’s cheap compared to other benefits such as health insurance.
The problem faced by many employers is not whether to offer life insurance but what kind and how much?
There are two types of life insurance: permanent and term. Permanent life insurance provides coverage for the life of the insured, so long as the premium is paid. A term policy provides coverage for a specified period of time. Most group life policies are term policies that cover the employee as long as he or she is employed. Some employers also offer term coverage to employee dependents (spouse and children.)
Generally, employers pay the premium for a basic term policy for their employees and offer additional coverage for those who wish to pay the extra premium. Premiums for dependent coverage are usually paid by employees.
As for the amount of coverage – a year’s salary is common, and most policies have a minimum amount of $10,000 per employee.Life insurance can be a complex decision. At Barham Benefit Group, we will address your concerns and collect the information that’s right for your company and your employees.