Simple, affordable life coverage for your employees
When employers want to offer meaningful benefits that support their team’s financial security, Basic Group Term Life Insurance is often one of the first choices. It’s a foundational benefit that provides employees with peace of mind knowing their loved ones would have support in the event of an unexpected loss.
What is Basic Group Term Life Insurance?
Basic Group Term Life Insurance is a life insurance policy provided by an employer to its employees as part of a group benefits package. The term “term life” means the coverage lasts for a specific period—typically as long as the employee is working for the company and enrolled in the plan.
This benefit pays a death benefit to an employee’s beneficiaries if the employee passes away while covered under the plan. Employers typically cover the cost of this policy for their employees, making it a valuable no-cost benefit to the workforce.
How does it work?
- Coverage amount: Most policies offer a flat dollar amount (like $25,000 or $50,000) or a multiple of the employee’s annual salary (e.g., 1x or 2x salary).
- Cost: Employers usually pay the full premium. If employees want additional coverage, they may have the option to purchase supplemental term life insurance at group rates.
- Term length: Coverage remains in effect as long as the employee remains eligible—typically while employed.
- Beneficiaries: Employees choose one or more beneficiaries to receive the death benefit if they pass away during the coverage period.
Key benefits
- No-cost to employees: Basic coverage is often paid for entirely by the employer.
- Easy to qualify: Employees are automatically enrolled or offered coverage with minimal or no medical underwriting.
- Financial protection: Provides employees and their families with essential coverage to help with funeral expenses, debt, or income replacement.
- Supports employee retention: Offering group life insurance is a way for employers to show they care about the long-term financial well-being of their team.
Considerations
- Coverage ends with employment: When employees leave the company, the coverage usually ends unless they choose to convert the policy to an individual plan (often at a higher cost).
- Limited amount: Basic group coverage may not be enough to fully meet a family’s needs. Many employees choose to supplement it with voluntary life insurance or individual term policies.
- Age reductions: Some group policies reduce the benefit amount as employees age (for example, reducing the benefit at age 65 or 70).
Supplementary Group Life Insurance
Additional coverage to enhance peace of mind
Supplementary Group Life Insurance is an optional benefit that allows employees to purchase additional life insurance coverage on top of their employer-provided basic group term life policy. This add-on offers employees the flexibility to tailor their life insurance protection to better meet their family’s financial needs.
What is Supplementary Group Life Insurance?
While many employers offer a basic amount of life insurance at no cost to employees, it’s often not enough to fully support a family in the event of a loss. Supplementary Group Life Insurance allows employees to increase their coverage amount—typically at affordable group rates—and provides the opportunity to extend coverage to spouses and dependent children as well.
This coverage is usually paid for by the employee through payroll deductions and is offered at a lower cost than many individual life insurance policies.
Key features
- Employee-paid coverage: Supplementary life insurance is voluntary and paid for by the employee.
- Customizable amounts: Employees can often choose coverage in increments (e.g., $10,000, $25,000, or multiples of salary) up to a specified maximum.
- Spouse and child coverage: Many plans allow employees to purchase additional coverage for their spouse and children at competitive group rates.
- Portability: Some plans offer the option to take the policy with you if you leave your employer, either by converting it to an individual policy or continuing it through direct billing.
- Evidence of insurability: Coverage amounts above a certain threshold may require answering health questions or undergoing a medical exam.
Why employees choose supplementary coverage
- Fill the gap: Employer-paid life insurance is often limited. Supplementary coverage helps bridge the gap between what’s provided and what’s needed.
- Affordable premiums: Group rates are often more economical than purchasing individual life insurance.
- Convenience: Easy enrollment through work and premiums deducted directly from paychecks.
- Family protection: Ability to extend life insurance to loved ones under the same plan.
Things to consider
- Coverage limits: There are often maximum limits on how much supplemental coverage an employee can elect.
- Health questions: Higher coverage amounts may require medical underwriting, especially if enrolling after the initial eligibility period.
- Job-based: Coverage typically ends when employment ends, unless portability or conversion options are used.
