Should You Be Offering Life Insurance as an Employee Benefit?March 07, 2017
One of the best ways to build loyalty among your employees and boost your retention rates, as you may well know, is to offer a great benefits package. There are many different perks that you can offer to show your employees that you appreciate their hard work.
But these benefits can extend beyond free coffee in the break room and even group health insurance. When thinking about the long term and how your company factors into their future, many employees consider life insurance a must-have employee benefit.
So, should you consider offering this coverage?
To answer this question, let’s explore the many reasons why employers and employees mutually benefit from employer-sponsored life insurance.
It Gives a Sense of Well-Being
Offering life insurance as an employee benefit can give your staff peace of mind knowing that their loved ones will receive the benefits of their policy should something happen to them. This can boost employee morale and their sense of well-being, especially if they are otherwise unable to afford life insurance on their own.
As a business owner, you can rest assured investing in life insurance for your employees because it is affordable and most insurance companies offer a group rate. This makes it a low-cost benefit for employers should you choose to pay the full premium.
Even if you choose to simply sponsor the coverage, employees will still pay a smaller premium than they would for a policy on their own. The cost per employee can also decrease dramatically depending on the size of your staff.
It Increase Retention Rates
As a business owner, you always want to offer benefits and incentives to attract top talent to your organization. By offering life insurance as part of your benefits package, you ensure that employees feel valued and are thus willing and eager to stay with your company for the long haul, and you will attract more quality candidates when hiring.
Simple to Access
Unlike health insurance, group life insurance policies don’t require employees to have physical exams before starting their coverage. Generally, all that is required is a health questionnaire. Even then, this is sometimes waived depending on how much coverage you have requested on the policy and how many employees you have.
Another great aspect of offering life insurance to your employees is that the first $50,000 of coverage is not subject to income tax. This applies even when the cost is covered by the employer on the employee’s behalf.
Are You Ready to Offer Life Insurance as Part of Your Employee Benefits?
If you are contemplating adding life insurance to your employee benefits package, you should consider the following questions first.
- Can employees request additional coverage beyond what you are offering?
- How will the policy be affected if an employee leaves the company? Will the policy be transferable? Do you feel comfortable offering one that is not?
- Are you going to cover the cost of the premium, or will the employee be fully responsible? Or if you choose to cover part of the premium, what will that percentage be?
- Will employees have the option of opting in or out of the policy?
- Will age and gender be a consideration when determining eligibility for life insurance?
- How long must an employee work for your company before being eligible for their benefits?
- Will life insurance coverage be open to both full-time and part-time employees?
- How will you determine the amount of coverage you offer? (Some employers choose to offer a policy that is equivalent to one or two year’s salary. Others choose to offer a base amount to all employees, and the employees can choose to get more coverage at their own expense).
While it is not legally required for employers to offer life insurance to their staff, it is a nice incentive to give your employees security and peace of mind. To learn more about group rates on life insurance for your employee benefits package, contact us today!