Why Group Life Insurance Make Good Business Sense
Life insurance is a key component of a comprehensive financial plan for employees, which is why many employers offer Group Life insurance as a benefit. Cumbre Insurance Services, LLC will help you examine all your options to determine what type of product best fits your organization and employees.
How Group Life Insurance Works
Group Life plans allow an employer to buy a master policy and then issue certificates of participation in the plan. Although each employee is underwritten as part of the employer’s group and no one is denied based on a medical condition, an employee typically has the right to keep their coverage and convert it to an individual policy when they leave the employer (with some restrictions).
A Group Term Life policy is typically the most affordable option for employers, and provides a large amount of insurance for a set period in a worker’s life. It usually is designed to provide benefits for dependents in the event of the insured’s premature death. A Whole Life insurance policy is more expensive, but it lasts longer and builds cash value over the course of its existence—value that the employee can borrow against or use in other ways.
Some employers also opt to offer additional protection for Accidental Death and Dismemberment (AD&D), which can cover loss of life or any of the five senses. It can be offered in conjunction with a Group Life policy or as a volunteer benefit.
Additionally, many employees also opt to buy more insurance, known as Supplemental Life insurance. These plans generally allow employees to purchase extra coverage — sometimes up to three or four times a worker’s annual salary.