Everyone starts small. But as your business grows, so does your employee strength. And to keep your employees with you, you should offer them some benefits. One such benefit is group life insurance. Experts feel that group life insurance for small business offers good value for money, and all companies should go for it.
The group life insurance covers health, life or long-term disability. It is the choice of the employer to offer all these or only a few to the employee. A business with less than 1,000 employees usually purchases group life insurance through an independent broker. The broker offers the most suitable policy, assisting the company to compare rates and understand different insurance products. The companies usually pay a particular portion of the premium of each employee.
There is no medical exam required for the guaranteed issue policies and hence the price paid for the policies by the small business depends on the number, average age and gender of the employers. The type of business is also be a deciding factor, as an explosives manufacturer would have to pay more than a software development company or a publisher.
If there is one employee affected with HIV or cancer, it does not affect the group’s rate. But employees on leave due to disability or maternity are not eligible for group life insurance until they join back.
As the business grows, there is a need for a re-evaluation of the employee benefits too. Smart companies have a periodic re-evaluation of factors such as age or gender of the employees which make the premiums even lesser.
An expanded group life insurance equals 2 or 3 times an employee’s annual salary. It also offers the ‘portability’ feature which means the employees gets continued coverage even after they resign or retire. Different types of employees may require different group life insurance policies. Some plans also cover spouses and children, without any medical examination.
Smaller companies can’t afford such plans. In such cases, employers can pay a particular amount of the premium and if the employees want more coverage, they can pay the extra amount.
To choose the right insurance company, you must check if it is financially strong. Also find out what size of businesses the company works with. If you have plans to offer voluntary group life insurance, check for positives such us portability, accelerated death benefits and waiver of premium benefits. This will help you pay less.