Enhancing Employee Benefits: The Role of Employer-Provided Life Insurance

If you’re a small or mid-size business owner, right now is a great time to reevaluate benefits you offer employees. September is Life Insurance Awareness Month and this month can serve as a good reminder to review how well-protected your employees are. Life insurance is a financial product that provides a financial payout to a designated beneficiary (or beneficiaries) in the event of the insured person's death.

Here are 5 ways employers can help their employees:

1. Group Life Insurance:

   • Many employers offer group life insurance as part of their employee benefits package. Group life insurance provides coverage to a group of employees under a single policy, typically at a lower cost than individual policies. Employers often cover the premium costs or subsidize a portion of them, making it more affordable for employees.

   • However, employees should note that this coverage may not be enough for their families. “Smaller firms tend to offer a flat dollar amount, maybe $25,000 to $50,000,” according to a workplace benefits specialist at LIMRA who was recently cited in a CNBC news article.

2. Key-Man Insurance:

   Key-Person Insurance covers specific valuable employees in the event of their death. This is a benefit for both the employee’s family and the company as it would provide a stop-gap which would give the company time to find the next key person. This is usually a benefit for CEOs, CFOs, and other organizational leaders.

3. Enrollment and Education:

   • Employers can facilitate the enrollment process by providing employees with information about the available life assurance options and helping them understand the benefits and coverage provided. This can include holding informational sessions, distributing brochures, and offering one-on-one consultations with insurance experts.

4. Premium Deductions:

   • Employers can deduct premium payments directly from employees' paychecks, making it convenient and ensuring that employees maintain coverage without having to remember to pay premiums separately.

5. Additional Benefits:

   • Some employers enhance their life assurance offerings with additional benefits. For example, they may provide coverage for accidental death and dismemberment (AD&D) or offer the option to purchase additional coverage at discounted rates.

Whether you are an employer or an employee, it’s important to understand the terms and conditions of the life insurance coverage offered, including any limitations or exclusions. Understanding the life insurance benefits will allow the company and your family to better prepare for the inevitable. Staggs Financial Services can help you set up individual or group life insurance packages today. You can schedule a free consultation here.