Business Life Insurance Policies Every Employee Needs

Business life insurance can help you meet the needs of your employees. More often than not, employees are not only looking for better wages or compensation; they are also looking for better insurance benefits. One very cost-effective solution to this problem is to offer your employees life insurance through your business.

In fact, you'd be surprised how many people actually don't have any life insurance at all. Therefore, employer-sponsored life insurance can prove to be very attractive - for the purposes of employee retention or attracting new talent. Employer-sponsored life insurance is relatively inexpensive, and even small businesses can provide this benefit to their employees through the purchase of a small group policy.

What Employer-Sponsored Life Insurance Is and What It Provides

As an individual, getting a life insurance policy can involve a lot of time and steps to complete the application process; for example, many insurance companies require that an applicant take a physical examination and submit to drug urine testing. However employer-sponsored plans usually don't have these requirements and are usually easily converted to personal policies, once an employee leaves the company.

Most company-sponsored life insurance policies provide life insurance coverage to the employee in an amount equal to their annual, or yearly, salary. For example an employee who makes $50,000 per year would generally receive $50,000 in life insurance coverage. In some circumstances, employers may offer considerably more coverage; and the amount of coverage offered is really at the discretion of the employer. Most of the time, employees are grateful to have been offered any sort of life insurance coverage.

Requirements for Company-Sponsored Life Insurance Policies

Most insurance companies require that the employer pay the premiums for company-sponsored life insurance plans. In addition, they may have requirements that specify a certain number of employee participants in the program. However, these types of policies can include additional types of coverage: accidental death and dismemberment insurance, coverage for dependents or family members and even travel insurance protection. These additional types of coverage can be charged to the employee directly, and are usually optional. Likewise, this coverage is generally very inexpensive.

The Cost of Company-Sponsored Life Insurance

Generally, most insurers will not provide coverage for groups with less than 10 members or employees. The average cost of a company-sponsored life insurance policy is relatively low and usually only costs $.05-$.10 for every $1000 worth of life insurance coverage. Of course, this is the monthly premium amount - so $50,000 worth of life insurance coverage would usually cost $2.50 to $5.00 per month. Additional coverage options will increase the cost of the monthly premiums; however, these additional optional coverage types usually only increase the premiums by a very small amount.

Keep in mind though; that the actual premium cost of any group sponsored a life insurance policy will be based on: the number of employees enrolled in the plan, your business claim history, age and gender of the employees and the type of occupation your employees are involved in. Usually premium rates are evaluated annually and are adjusted - if your business has made no claims then rates may go down and if you're policy has paid out on a life insurance claim, then they could possibly increase slightly.

Offering life insurance to your employees is relatively cheap and makes a very attractive fringe benefit that every employee will appreciate. So, if you're considering different methods to better retain quality employees, then offering company-sponsored life insurance should be one of the first benefits you offer.