Protecting the health and wellbeing of your employees isn’t just the right thing to do, it’s also good for business. Healthy employees are more productive, loyal and happier at the workplace. And one of the best ways to prioritize your employees’ health is to offer a great benefits package, including not just health insurance, but also extras like life insurance.
Before you can feel comfortable offering life insurance to employees, you need to grasp what it actually is. Group life insurance is offered by an employer or labor organization to their employees or members and is often included with a benefit package. Unlike individual policies, employers have the ability to purchase group life insurance on a wholesale basis and negotiate lower rates, making premiums much more affordable.
The most commonly offered group life insurance is called group-term, which is an employer-provided life insurance. In that case, the policy owner is the employer or organization. One other thing about group-term life insurance is that employers can offer life insurance to smaller sub-groups of employees, separating the group by factors like marital status, job duties, length of insurance and other related factors. Term life insurance gives families piece of mind knowing that the beneficiary of the policy receives money if the insured dies during their working years.
For an employer to qualify for group life insurance, your company must have at least two full-time employees who work a minimum of 30 hours per week. Under the umbrella of group life insurance, there are options including flat or salary-based benefit plans, accelerated death benefits and grief, legal and financial counseling.
One other decision to make is for the employee to decide how much coverage is needed. Studies show that although most Americans intend for their life insurance to cover 14 years of expenses after their passing, the money typically covers only three years of expenses. When offering life insurance to your employees, remind them to be realistic with how much money is needed.
- Do you want the money to pay off your mortgage?
- Do you want the money to replace the income of the main breadwinner?
- Do you want the money to pay your children’s college tuition?
- How many dependents do you need the coverage to support?
- Do you want the coverage to pay for long-term care for a spouse or child?
Learn more about Blue Cross Blue Shield of Michigan life insurance options for your business here. And find out how you can provide peace of mind to your employees by checking out these other blogs:
- Four Specialty Benefits Worth Adding to Your Health Care Program
- The Key to Employee Retention: Better Benefits
- Why Dental and Vision Care is Important for Michigan Employees
Learn more about improving the health of your employees, and lowering your business’ health care costs, by offering Blue Cross Blue Shield of Michigan’s specialty insurance coverage at BCBSM.com.
About the author: Kevin P. Stutler is vice president of Enterprise Ancillary Business for Blue Cross Blue Shield of Michigan. His responsibilities include development and execution of strategies for all ancillary products within the Commercial Business division, and positioning Blue Cross to expand these products and services to better serve the Michigan market. Stutler has held a number of leadership roles prior to joining the Blue Cross in 2011. He was the regional vice president of Specialty Sales & Distribution at WellPoint, Inc., and senior vice president of Financial Institutions/Group at American United Life Insurance Company. Stutler earned his bachelor’s degree in history from The Ohio State University.
Photo credit: Official GDC