Group Life Insurance

A self-employed or small-business owner is always looking to maximize benefits while reducing expenses.Life insurance premiums tend to be some of the most valuable benefits. It provides additional incentives to potential new hires and it offers a sense of security to longtime employees.Fortunately, group life insurance is one of the most affordable types of insurance you can provide for your employees. This becomes a true statement specially after comparing the cost of this insurance to the cost of different retirement plans and medical insurance. However, there are many factors to consider when choosing the best life insurance plan for your business employees.While the process of buying policies is simple, finding the right policy blend for your business, or if you are self-employed, can be challenging.

Not every business can qualify to offer a policy for its employees. In order to determine whether your business is or is not able to qualify, you will need to talk to a qualified insurance professional. Although there are many things you can learn on your own and many things you can check independently, only a professional knows the specifics of regulations in your area and your industry. Talking with a qualified agent will make it easy to get your questions answered, and can also easily be turned into a discussion about purchasing a policy should you decide it’ll be a favorable option.

The main reason an established business cannot obtain group coverage is because the company's group is determined to be overly high risk. There are a number of reasons for this, ranging from participation in an industry that is particularly hazardous to simply having too few employees. If you are too small, your company may be unable to acquire coverage and your employees may need to seek individual term life insurance.

Group term life insurance tends to be cheaper, compared to an individual insurance policy. In USA, an employer can claim Tax Deductions for investments in group term life insurance upto $50,000. However, any amount exceeding this is taxable.

All the features of a term life insurance apply to a group term life insurance too. An employee may contribute a very small portion of the group term life insurance premium, while the major contribution is usually made by the employer. It needs to be renewed periodically through yearly paid premiums. The procedure for payment of premiums and renewal is generally handled by the human resource department of a company, on behalf of the employees. Group term life insurance calculation for premium is made by insurance companies after an analysis of the degree of risk they will have to take. 

One of the major pros of this insurance product is its affordability. The premium size for a group term insurance policy is a fraction of what one would have to pay for a whole life insurance policy. 

The major con of opting for group term life insurance is that it is hardly enough to cover expenses of the beneficiaries. The amount is generally quite paltry, compared to whole life insurance or single premium life insurance policies. Second con is of course the limited time span for which the coverage is offered, after which it discontinues, with no payouts. 

Once you have chosen the benefits you want to provide and actually acquired your group term life insurance policy, you've finished the most difficult and research-intensive part of the process. You can expect to have your organization re-evaluated every 5 years or so to determine whether your employee base has changed substantially and would therefore merit a change in the premium.

Even in a tight economy, offering a policy can be a big bonus for the right kind of company. If you think the benefits might help your company, contacting a licensed agent (www.MintcoFinancial.com) is a logical next step, allowing you to explore options without making any commitment to purchase.