Life insurance is one of the core benefits of any well designed Group Benefits Plan. Nobody plans to die young, but it does happen to people of working age. Imagine the interruption your business could face if you lose a colleague, or imagine how a tragedy would affect your staff members upon losing a close family member or loved one. Nobody has ever complained about having additional coverage.
Life Insurance is available for each employee. Upon death, the proceeds are payable to the employee’s chosen beneficiary. Coverage for dependents can also be made available. An Employer provides a basic amount of Life Insurance for each employee which is almost always available with no medical statement required.
The plan may also provide Additional Optional Life Insurance Coverage for employees and their dependents to purchase, and which would be subject to a medical statement. This may be very attractive to employees starting or with young families who want extra coverage in case the unthinkable happens.
Many plan designs are available and can be customized by occupation, years of service, or other non-discriminatory categories. Coverage can be a flat amount (for instance, $25,000 per employee), or a percentage of earnings (say 200% of annual earnings).
Depending on the number of employees and the level of coverage chosen, the amount available without a medical declaration can be a very attractive incentive to employees. This is especially so for employee pools with middle-aged and older workers for whom individual life insurance coverage may be prohibitively expensive and require a medical.
Many employees do not have sufficient insurance coverage on their spouses or dependent children. This benefit provides an inexpensive way to make additional protection available. Usually, dependent life coverage is a nominal amount, such as $10,000 on the spouse and $5,000 on each child. The intention is not to replace a personal life insurance policy but to provide financial assistance at a critical time of need so that unexpected expenses such as funeral costs are taken care of and do not add additional stress and worry to an already grieving employee.
Accidental Death & Dismemberment coverage provides an ideal opportunity, at a minimal cost, to significantly increase the insurance payable to beneficiaries. Should death occur due to accidental means, an additional death benefit payout is made, usually for the same amount of the Life Insurance policy thus effectively doubling the amount of coverage. Payments are also made for loss of limb, hearing, or eyesight.
As part of our Human Capital Benefits Process, we will work with you and your employees to anaylse current life insurance coverage, spot gaps or shortfalls that may be crucial and create a unique Benefits Blueprint that outlines our recommendations for Life Insurance Coverage and other elements of your Group Benefits Plan. Once we are all aligned on that we begin roll out of the plan with the selected carrier and products.
A properly-designed employee benefit plan can be a powerful tool to satisfy the need for cost containment and at the same time provide employee satisfaction and retention. Click here to find out more about the benefits available.
Benefits continue to be, for the most part, tax-free rewards and incentives you can offer employees. To find out how benefits are currently taxed: click here to find out more.