Home Business Insights What is Group Life Insurance and Why Do You Need It?

What is Group Life Insurance and Why Do You Need It?

by State Farm (Sponsored)

Group life insurance is one of the most common fringe benefits provided in America. This is due in part to its affordability. It is usually provided by employers or labor organizations to workers. The cost is so low that sometimes workers receive this for free. But what is it exactly and do you or your workers need it?

 

The Basics of Group Life Insurance

Group life insurance is a lot like purchasing insurance for workers wholesale. You have one contract with the insurance provider and this extends to multiple people in your company or organization. This allows you to provide insurance for everyone, and even yourself, for a much lower cost than if each person purchased a life insurance policy on their own.

While the basic coverage may be free to employees, or provided at a reduced employee cost with the difference being paid by the employer, some people may choose additional coverage. This upgrade increases the premium for that individual. You may pay for this on behalf of your worker as a benefit, but it is also fairly normal to deduct the cost of the additional premium from the worker’s paycheck. As with any other insurance policy, workers select their beneficiaries. These people receive the payout in the event of the employee’s death.

 

Why You Should Offer Group Life Insurance

A group life insurance policy provides eligible workers and their families with peace of mind. For many workers, especially young ones, life insurance is a very important financial benefit.  Life insurance is also especially important for high-risk workers with dangerous jobs. They may not have other insurance options open to them.

Your business will also benefit from providing this insurance policy. Chief among these benefits is that premiums are generally income-tax deductible. Offering such an important fringe benefit also makes you a more attractive employer, so you can recruit and retain the best talent in your area.

State Farm provides group life insurance policies for businesses with five or more employees in most states. Find out if your business is eligible by visiting https://www.statefarm.com/small-business-solutions/insurance/small-business-life/group-life.

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