Group term life insurance is offered to people who are entitled to an association or an employer. This type of insurance coverage can also be issued for people working in a school or organisation. Group term life insurance is an excellent option for an employer to provide his employee financial protection against premature death. Buying a life insurance for federal civilian employees is of great benefit. The premium of this group insurance increases annually. The website www.360financialliteracy.org offers help on buying perfect group term insurance for your employees.
The article helps you to know about eligibility criteria to obtain group life insurance. It also talks about the benefits provided by a group term insurance for the employer and his employees.
It is up to the employer to decide on the number of staff he wants to include for the group term insurance. He can include every member of the organisation or company or exclude certain employees. The employers provide insurance based on the number of months or years worked. Certain companies specify a period of two to three years of work completion before applying for a group term insurance. Companies also provide insurance policies for people who have worked for a minimum of five months.
People who start up a business think of providing insurance to the employees only when the number of his employees rises to a minimum of ten. An insurer offers immediate coverage without any evidence if the number of employees is more.
Benefits For Employees
The group term life insurance serves as a life insurance for the employee. But the coverage limit is up to $50,000. So the employees should consider the group term coverage as a supplemental option. He should go for other insurance plans for higher coverage. The cost incurred for the coverage can be deducted from the salary of the employee but could not be included in the income. On the death of the employee, his beneficiary need not pay any federal tax on the death benefits.
Options For Employees
An employee can provide group term life insurance of several coverage amounts. The coverage amount is generally based on the type and nature of work of the employee. The company can offer coverage of about $50,000 to customer service personnel. The same company can buy coverage for an engineer, which is three times of his annual salary. The premiums paid by the employer for the group term life insurance are completely deductible from tax.
Cost Of The Premium
The premium cost depends on the coverage amount the employer wants to provide. If an employer intends to provide a coverage amount of $1000 per employee, then the premium amount can range from $10 to $1000 per month. The premium cost also depends on the number of staff, their age, the type of business, etc. The cost of the premium increase when the age of your employees increases, as there are more chances of death. The cost of the premium may decrease if the number of employees is more.
The above are the basic information you need to know about general term life insurance.