Employers and Family Life Insurance

When we have a family, life insurance can be very important to have. One problem for young families is that life insurance can also be expensive. A nice this is that many employers do offer life insurance policies that their employees can purchase.

Most of the time, these policies can get major discounts, which allow the employee to pay a fraction of the cost that they would normally pay to get the same coverage on their own.

Many employers provide universal family life insurance as a group to their employees. Since the employer can get more people to sign up, the insurance company will typically cut them a deal and allow the policies to be held at a small part of the cost that they normally would be purchased at. This is ideal for young and new families as well as for families and individuals who have previously diagnosed health issues. Should the employee quit his or her job though, the policy will remain the same, but the coverage for the individual will likely become very expensive.

Another nice thing about employer held policies is that the premiums will come out of the policyholder’s paycheck either monthly or even bi-weekly. The group preferred policies are tax-deferred, which helps the employee to save up for retirement, especially if the employer also offers a 401k. These policies typically do not call for a medical examination, which can be highly beneficial.

Many companies use their offerings of universal family life insurance to help lure qualified and talented employees into their company if and when they need them. These life insurance policies are most beneficial if the employee remains with that company for a long time, which helps the business to reduce its turnover rate and hold on to valuable employees. Also, the policies often can include the employee’s dependents. This only serves to make the offer even more enticing.

Many times, the companies will also provide ancillary programs with the policies such as legal help with preparing a personal will. Sometimes they will offer help with estate planning too. The benefits that are added help the policyholder to save large sums of money over time, which is very helpful, especially with younger families. Those who have the same coverage or even the exact same policies and benefits will be spending heaping amounts of cash compared to what the employees would be paying. Thus, if an employee finds that their employee is offering such benefits to them, they should not think twice prior to signing up for the offer and taking advantage of it.

Employers benefit from these policies as well. They can take out key employee life insurances that pay out to the company in case that key employee should suddenly pass on. This is important because these employees are considered “key” because of their high levels of knowledge as well as skill. Also, when the company owns the policies, it can utilize the tax-free funds that have accumulated over time to protect against future liabilities.