There are many advantages to utilizing Group Life Insurance. If you are unsure about buying a group life insurance policy, this simplified list will share the 9 largest benefits to this kind of policy and how they should be considered before purchasing:
- Helps to satisfy an employer’s moral obligation to the dependents of employees.
- Contributes to employee morale and productivity.
- Provides a before-tax benefit to employees that they otherwise would have to pay for with personal after-tax dollars.
- Is expected in most firms as part of the employee benefit package. Its absence would put an employer at a competitive disadvantage in hiring and retaining employees.
- Costs less for the employee than an individual policy, even though the plan may be contributory. From the employee’s perspective, group life insurance (especially with respect to the first $50,000) is a bargain since, in most cases the employer pays all or most of the premium.
- Provides insurance for those who otherwise might be uninsurable and provides insurance at standard rates for those who might be insurable only at an increased premium.
- Through the conversion privilege, enables terminated employees to convert to individual policies without submitting evidence of insurability.
- Forms a base on which an employee can build a personal financial program.
- Allows an employer to deduct the premiums for group life insurance.
Reproduced with permission. Copyright The National Underwriter Co. Division of ALM