For business owners providing group life insurance is a way to protect your company and its employees. It can provide your family with the resources necessary to make the best decision regarding how to handle the business in the event of your death. Buy-sell agreements can ensure that what you worked hard to build can continue your legacy if business partners are involved. 

What is Group Life insurance?

Group life insurance is commonly offered as an important part of an employee benefits package. Most employers offer a group term- life insurance policy that pays death benefits if the insured member passes during the length of their coverage, which is often timed with their employment duration before retirement. Whole life insurance lasts until death, regardless of time frame; premiums and death benefits may be fixed amounts. Other options are Universal life and Variable life.

Group Life Insurance Facts

There are many variables in putting together a group life insurance policy. Small business owners have many options to offer, choices of benefits, and issues to consider: 

  • Cost of premiums – Companies often start with a base coverage that they pay for, offering to employees free of charge. If employees need more, a package can be designed to include optional add-on coverage deducted from employee paychecks.
  • Coverage amounts – Benefits and amounts of coverage may vary depending on the employee’s level in the organization. 
  • Policy eligibility – Group plan participants may all automatically become enrolled in the base plan as soon as they are eligible.  Further coverage may require additional qualifications for eligibility, including some underwriting.
  • Tax ramifications – Employers may provide up to $50,000 for group life insurance coverage, tax-free. Differentiated tax benefits for executives may be considered taxable for the first $50,000. 

Group life insurance is a significant benefit to offer your employees, providing them valuable and affordable access to insurance coverage. It is the second-most popular benefit distributed by employers to employees and is easy to administer. Contact Don Hoffer Insurance today, and we will find the best group plan for your company and employees.