- Benefit plans for small businesses
- June 11, 2015
Life insurance offered by an employer or large-scale entity (i.e. association or labor organization) to its workers or members is called group life insurance. It is typically offered as a piece of a larger employer or membership benefit package.
By purchasing coverage through a provider on a “wholesale” basis for its members, the coverage costs each individual pays will be much less than if they purchased an individual policy.
Those receiving coverage may not have to pay anything “out-of-pocket” for policy benefits or they may elect to have their portion of the premium payment deducted from their paycheck.
· Federal income tax deductible premiums
· Desirable fringe benefit offered to new employees
· Reduced turnover, saving your money in hiring and training costs
· Contributes to employee security and higher morale
· Rates tend to be lower
· Employees can easily select and change beneficiaries
· Waiver of Premium disability rider may also be available
· Some policies may offer optional features such as accidental with options for childcare and education
· Some plans offer will and estate planning
Many group plans allow an increase in coverage following a family status change. Oftentimes there will be a certain amount you may increase by answering questions about your health or having a medical exam. Sometimes increases in coverage are automatic, as when you receive an increase in salary.
Generally, if used, the insurance plan provides your family with a lump sum payment in the event of your death. The master policyholder is the employer.
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