If you’ve been thinking about ways to expand employee wellness at your organization, don’t overlook a key benefit that is popular with employees and relatively easy to administer: life insurance. Providing your employees with safety nets like this one can help boost peace of mind, reduce stress, and improve focus on the job.
Read on for some of the key benefits of group life insurance, as well as some information about the different types of life insurance policies and a few other questions to consider if you decide to move forward.
Life insurance policies are usually inexpensive and easy for employers. Group life insurance premiums are considerably lower than premiums for individual life insurance policies, mainly because group life insurance is less risky for the insurance company. Insurance companies base group life premiums on the overall risk of the company or group, and for most companies, that risk factor is low. Also, since group life insurance is typically bundled with health insurance, sales and administrative costs are minimal.
Good benefits help improve retention, recruiting, and morale. A good life insurance policy can mean a lot to an employee if they have a family or children. Life insurance is one of the key benefits that employees look for when they job search, and offering even a basic policy can help set you apart as an employer of choice for desirable candidates.
Life insurance can boost security and peace of mind for employees. Financial security is associated with higher productivity on the job. The Consumer Financial Protection Bureau has found that when employees have to spend time and energy worrying about providing for their families, they’re less productive. A good life insurance program is a key factor in overall financial health, and provides employees with the peace of mind that lets them focus their energy on their daily tasks.
Employees who are covered by a reputable life insurance policy know that, in the event of unforeseen circumstances, money will be paid directly to their beneficiaries. Their loved ones can use the funds as they see fit, for reasons such as:
- Replacing lost income.
- Covering basic living expenses.
- Paying household debts, estate taxes and funeral expenses.
- Funding a child’s education.
- Supplementing retirement savings.
Types of life insurance
There are two main types of group life insurance policies:
Term, which covers the employee for a specific length of time, typically the length of employment. Employers typically provide term life insurance coverage equal to an employee’s yearly salary, and pay premiums themselves. Premiums for term policies are less expensive because the insurance lasts only a limited time, whereas those for permanent policies cost more largely because they provide coverage for a longer period.
Whole (or permanent), which continues for as long as the employee lives. This type of insurance is much more expensive and premiums are generally paid by the employee. Because it accumulates over time, and the policy holder can cash in the policy before they die, whole life insurance is an investment. But financial experts tend to regard these policies as a bad investment because their rate of return is typically small.
Factors to consider if you develop a life insurance offering
If you decide to move forward with offering life insurance, here are some key questions to consider:
- Will you allow employees to purchase additional coverage or raise their coverage level?
- How will you transition the coverage if an employee leaves the organization?
- How much of the premium will you pay?
- What length of coverage will you offer for term life insurance (one year, two years, or the length of employment)?
- Will employees be covered automatically or will coverage be voluntary (opt-in)?
- Will you offer the option of additional benefits?
- Will all employees be covered or only some?
- How will you find a reputable life insurance vendor?
Life insurance coverage with Aliat
If you’d like to provide high quality, affordable life insurance coverage to your employees, consider Aliat as a trustworthy partner. We offer three types of life insurance:
Basic term life—Employer-paid coverage offered for a set period of time that provides beneficiaries with essential financial protection.
Supplemental term life—Employee-paid coverage that allows employees to purchase additional protection as their needs change over time.
Dependent term life—Coverage for an employee’s spouse, civil union partner, domestic partner, and/or eligible children.
With Aliat, eligible employees receive:
- Competitive group rates.
- Guaranteed issue, with no health questions or medical exam required.
- Convenient payroll deductions.
Get in touch with us today with questions about life insurance or for more information about how we can help.