Choosing a Group Life Insurance Policy
If you're the owner of a business with employees, one of the best benefits you can provide is company-wide life insurance. By providing life insurance for your employees, you show that you care about their families' lives and can act as a big incentive for future employees. By buying a single policy under one owner (or under a group like a labor organization), you can provide life insurance for anyone within the organization. Group life insurance is often bundled with other employee benefits, such as health insurance, dental insurance, disability and others.
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Basics of buying group life insurance
Buying group life insurance for your business is often like buying in bulk: the cost per insured employee is on the whole cheaper than what it would cost the employee to pay for a similar amount of coverage on their own. Most businesses opt for a term life insurance policy, meaning it's renewed every year, usually with an increase in the cost of premiums. A majority of the time, the owner pays for most or all of the premiums, or else an amount automatically deducted from the employee's paycheck. It's up to the policy holder to how much coverage each employee gets, but most businesses provide their employees with a sum around one or two times the employee's annual salary. If the employee feels they need more coverage for their family or personal situation, they can purchase additional coverage on their own.
Group term coverage ends when the employee leaves your company or the specific term of coverage ends (for example, reaches a certain age that your premiums won't cover.). Employees are often given the option of converting their group policy into an individual one, but the price of the premiums usually increases dramatically and there are usually cheaper individual life insurance options available.
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