Employee Benefits

Structuring Group Term Life Insurance Policies

You may decide to structure your Group Term Life Insurance in such a way that your employees pay part of the cost via payroll deductions. Your insurance company may also offer different options that employees can pay for, such as these:

Supplemental Insurance. Under a supplemental or voluntary term life insurance plan, employees can choose to pay more in order to receive a higher death benefit. This supplemental insurance will be priced at the group rate, so employees will pay less for it than they would if they bought life insurance on their own. A supplemental insurance plan may require employees to share their medical history or undergo a physical examination.

Permanent Coverage. Your insurance company may also offer employees the opportunity to convert their term life insurance to permanent life insurance. The most common form offered is Whole Life Insurance, although other forms may be offered. Employees will have to pay higher premiums for this type of plan, and will most likely have to share their health history and complete a medical examination. However, the employee will also get to keep this kind of insurance if her or she leaves your company.

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