Whether you’ve recently got a new job or it’s open enrollment season, you may be able to get life insurance from your employer at no extra cost. It doesn’t matter if you work out consistently or eat healthy; you’ll still need life insurance, ideally from your employer, for end-of-life planning.
What is Group Life Insurance?
More Americans are covered by workplace plans than individual insurance plans, but can your employer offer basic group life to you and your coworkers? Maybe, but probably yes.
Free Under Employer-Provided Insurance
If you’re under an employer-provided health insurance plan, there’s a high chance they’ll offer free life insurance as a benefit. Sometimes your employer may not know they can offer this benefit to their employees with the same health insurance policy they’re already providing.
Coverage is Low, Up Set Up is Easy
Under a group life plan, coverage ranges from $25,000 to a percentage or multiple of your annual salary. Since coverage is low, you don’t need a medical exam or answer a questionnaire.
Setting up a group life insurance plan is easy, and because basic policies are free, there’s no reason not to get it. Just fill out any required forms by the deadline and name your life insurance beneficiary. If you don’t, your assets will automatically go to your estate or current spouse.
You Can Buy Supplemental Insurance
If $25,000 is too low, you can get supplemental insurance from your employer's insurance plan. The amount of coverage varies depending on your employer and what type of insurance they offer. High-cost life insurance plans can cover five times your salary or up to $500,000.
What Are the Benefits of Group Life Insurance for Employees?
Employees benefit significantly from using their free group life insurance. If employers offer group life insurance with their health insurance plans, employees will cash in on the following.
1. Default Low-Cost Coverage
Under a group life insurance plan, members are afforded low-cost coverage. Next to individual insurance plans, group life insurance is more cost-effective and provides default life cover.
2. No Medical Exam Prerequisites
Employees under group life insurance don’t have to answer a questionnaire or take a medical exam. All they have to do is sign up with their provider if the coverage limit is minimum or low.
3. Easy Claim Settlement Process
If you want a hassle-free claim settlement process, look no further than group life insurance. To initiate the process, just submit the documentation. Overall, you’re in for a quick claim process.
4. Ability to Increase Insurance
Not a lot of young people have life insurance policies, but an employer can help them dip their toes in. The earlier you sign up for life insurance; the cheaper supplemental coverage will be.
What Are the Benefits of Group Life Insurance for Employers?
It makes sense that employers would want to save a bit of money here and there, but they can keep more cash in their pocket if they invest in their employees' futures. Here’s why.
5. Low Premiums From Most Insurers
Employers who offer life insurance as a benefit often pay high premiums. With group life insurance, you’ll reduce what you pay each month because you’re combining everyone's plans.
6. High Morale Amongst Employees
When your employees have peace of mind, they feel happier. A group life insurance policy can keep employees stress-free, so they’re able to focus on other essential tasks for their job.
7. Low Employee Turnover Rates
Since so few employers combine dental, vision, and life insurance with their health plans, group life insurance is a hard to find benefit. Employers who offer it can reduce attrition rates.
8. High Tax Benefits and Savings
Any premiums paid towards group life insurance policies are tax-deductible. Employers don’t just save money on recruitment and productivity. They also get a bigger income tax refund.
Group Life Insurance is Great for Employers and Employees
Group life insurance is convenient, inexpensive, and has a high acceptance rate for employees. However, employers also benefit from cost savings thanks to a higher morale and low turnover rates. In the end, there are few, if any, disadvantages of signing up for group life insurance.
