Do you own a business in New York City? If so, you know how important it is to differentiate yourself from other employers. One way to do this is by offering comprehensive benefits packages. Group life insurance covers all your employees under the same policy and provides financial protection for beneficiaries in the event of an unforeseen death. At Margolis & Associates, we provide NYC Employee Life Insurance and Employer Paid Group Life Insurance that can improve your employee acquisition and retention rates.
What Is Group Life Insurance?
Group life insurance covers a group of people, usually employees in the same company. It’s a single policy that provides a cash payout to named beneficiaries. Combining several policies under one account makes group life insurance more affordable by decreasing the overall risks for insurers.
Types of Group Life Insurance
There are three main types of group life insurance, term, whole, and universal.
Term Life Insurance
Term life insurance is the most affordable group life insurance. It provides coverage for 1 to 30 years, as specified in the policy. If a policyholder dies within the term, their beneficiary receives the death benefit. However, once the term ends, the policy has no value.
Term life insurance has the following advantages:
- Low premium rates based on age and health.
- High coverage amounts for beneficiaries.
- No medical exams or underwriting.
However, term life doesn’t have a savings component and policyholders lose their coverage when the term ends, or they leave your company. Term life insurance may work if you have a limited budget or if your employees want coverage for a specific need, such as covering a mortgage or other debt.
Whole Life Insurance
Whole life insurance provides coverage for the entire lifetime of the insured member. It accumulates cash value at a guaranteed rate. Your employees can take out loans on the cash value. Plus, the premium rate and the coverage amount remain constant over time.
The main benefits of whole life insurance are:
- Lifetime coverage (if the premium is up to date)
- Cash value accumulation
- Cash value is tax-deferred and death benefit is tax-free
Universal
Universal life insurance is an adjustable permanent life insurance that provides coverage for the entire lifetime of your covered employees. The cash value component varies based on how well underlying investments perform.
Here are the advantages of a universal life policy:
- Lifetime coverage policyholders can modify as their needs change.
- Cash value growth produces a source of income or savings.
- Policyholders can increase or decrease the premium rate and the coverage amount.
Factors to Consider Before Choosing Group Life Insurance
The cost and availability of group life insurance depend on the number of employees who sign up, among other factors. Large groups have more bargaining power, and the age, health, and occupation of the group members will affect the eligibility and cost of group life insurance.
What are the budget and goals of your business? The coverage amounts and duration vary depending on what type of plan you choose. For instance, term life insurance is a cheap, simple policy you can implement quickly. However, whole life and universal insurance have more flexibility and benefits.
Before you make a final decision, find out the needs and preferences of your employees. Some employees may need higher coverage amounts while others prefer policies with low premiums even if they come with fewer benefits. Work with the team at Margolis & Associates to ensure that you fully understand the regulatory requirements that affect your group life insurance plan.
Contact a Professional Group Life Insurance Provider
Are you looking for group life insurance policies that fit into your budget? Help your employees protect their loved ones with the right life insurance in Nassau County and the Tri-State Area. Contact Margolis & Associates for a no-obligation quote.