Seven Advantages of Offering Basic Life Insurance to Your Employees

When tragedy strikes a member of an employer’s workforce, it is unsettling for everyone and can cast a dark cloud over the workplace. 

Life insurance is a popular employee benefit that is advantageous for both the employee and the employer. Here are a few ways that life insurance can benefit employers:

1. Basic life insurance can offer piece of mind for the burial of the employee at a minimum, if not other expenses that will help the family during a tough transition.
2. Employers not offering a life insurance benefit may be a drawback to those employees who are considering getting a policy.
3. Employers may feel obligated to help with funeral expenses or compensation when an employee’s family lacks the resources or a long-time or key employee passes. In addition, other employees may pressure their employers to offer financial assistance to the family in these cases.
4. Life insurance often includes Employee Assistance Programs (EAP) that can help surviving employees, their coworkers, and the family of the deceased employee cope with their loss. If the loss occurred in the workplace, many EAPs offer in-person grief counseling with employees for an additional fee.
5. Unlike medical insurance, life insurance can be “classed” so that only certain employees receive the benefit to keep costs and administrative work to a minimum. However, it’s important to note that the rates will lower as the number of covered employees increases.
6. Smaller companies are often limited on employer paid life insurance to $25,000 or $50,000 depending on the carrier. The benefit is guaranteed issue, which means that any eligible employee can obtain the coverage regardless of medical fitness.TIP: If you want to provide more coverage that’s guaranteed issue, you can purchase voluntary life insurance for employees such as executives, owners, managers, or those who have worked for the company for a longer period of time. This can usually double the benefit.
7. Life insurance is relatively inexpensive for the value of the benefit.

If you are interested in offering life insurance to your employees, contact your ARC client advisor to review your options.