Bernardini & Donovan Insurance Services

Group Life Insurance

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In order to retain hard-working, top-notch employees, it is important to offer a variety of benefits to help sweeten the pot and entice them to stay at your business. That is why offering group life insurance to your small business is a good idea. It’s not only a good supplement to existing individual life insurance, but it is also inexpensive way to provide additional benefits to your employees.

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Group life insurance is a fantastic way to add a necessary benefit at a very low cost to the employer.

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What group life insurance plan to offer your employees

On average, small policies are offered on a guaranteed issue basis, which means no medical exam is required from any of the employees that are insured. It is important that employees understand that group life insurance isn’t meant to take the place of individual life insurance policies because group plans generally only cover anywhere from $10,000 to one year’s salary. One year’s salary isn’t enough to support an employee’s dependents in the event of their death.
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The price of a group insurance package is determined by the number of employees, their gender, average age, and type of business that you operate.

The more hazardous or “dangerous” the job, the more a company will pay per $1,000 worth of group life coverage. Also, the group’s rate is not affected if an employee suffers a severe medical condition, but continues to work. After the policy has been issued, an employee will remain covered in the event they need to take a leave of absence. However, if the employee is on disability or takes a leave of absence before the group life insurance policy is issued, they will not be covered under the plan until they return to work.

Reevaluating your small business’ group life insurance plan

Larger employers generally enjoy lower premiums for group life insurance. However, this benefit is not expensive for any employer. Employers may also be able to have tiered life insurance benefits based on employee classification. Regardless of the size of your company, it is important to reevaluate your group insurance plan regularly. A group life insurance plan should be reevaluated and reassessed when your company grows significantly, hires executives with larger salaries, increases in the number of employees,
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the demographics of the employee population changes, or when it improves previously offered benefits. By checking back with your broker as your business grows, you may be eligible for a lower life insurance rate.

There are different ways an employer can structure their group life insurance plan. One way is to pay a multiplier based on annual salary. Another option would be to offer different amounts based on employee classification. There is a lot of flexibility in designing a group life insurance benefit.

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Family Coverage

Employers may choose to offer additional life insurance known as Voluntary life insurance.

Voluntary life insurance is additional coverage paid for by the employee. Under this coverage, the employee will have the opportunity to add family members to their coverage.
When it comes to offering voluntary group life insurance plans, it is a good idea to research insurers who offer the features that you would like to provide. These may include portability, accelerated death benefits, or even a waiver of premium benefits.

What are the qualities to look for in a life insurance company?

  • Financial strength-When a life insurance company has a good-to-great financial status, it is the best indicator of its ability to pay claims.
  • What their expertise area is-If an insurance company mainly deals with larger companies, and your company only has 20 employees, it may not be the right one for you. It is important to find an insurance company that deals with companies of your size, so you will get the best rates and premiums available.
  • Features-Look for insurers who offer the type of group life insurance you’d like to purchase, as well as what features you would like to offer.

Questions about your Life Insurance Needs?