Life Insurance

Group Life Insurance plans can offer employees the added security of a combination of Employer paid Basic Life Insurance and Employee paid Voluntary Life insurance coverages.

Employer’s can provide and pay for up to $50,000 of term life insurance coverage to employees without having to address the taxation issues incurred when more than this amount is provided. Employers can design basic life insurance plans, for example, to provide a flat amount per each employee; or, be based on a multiple of income, subject to a pre-determined maximum; or, based on classes of employees such as Class 1 = Owners/Officers $50,000; Class 2 = Managers and Sales staff $30,000; and, Class 3 = All Other employees $25,000.

Employers paying for more than $50,000 of Life Insurance for employees are required to charge employees a pre-determined amount for tax purposes. The IRS Table PS 58 rates apply to these costs and generally are much higher than the actual cost of insurance. As such, most employers limit the amount of life insurance they pay for to the $50,000 amount per employee. However, voluntary, employee paid Life insurance can be provided to employees, their spouse and their children. Typically the employee is eligible for an amount based on a multiple of their salary subject to a pre-determined maximum; Coverage for spouses is subject to a percentage of the amount the employee purchases for themselves and children are generally eligible for a flat amount per child.

Coverage can provide both a Life Insurance benefit plus an Accidental Death Benefit (AD&D). AD&D is an inexpensive benefit that can be voluntarily added up to the amount of Life Insurance purchased.

Voluntary Life plans are subject to a maximum amount of coverage that is guaranteed issue, without evidence of insurability and, for amounts in excess of the guaranteed issue amount, employees must submit an evidence of insurability/health statement that is reviewed and underwritten by the carrier before such additional coverage is issued.

Employees generally working 30 or more hours per week are considered full time employees and are eligible to participate in Employer sponsored Life Insurance Plans.

Horenberg Insurance is committed to educating our clients and their employees on the options available to them and to assist with the evaluation, selection, implementation and on-going service requirements of plan administrators and plan participants.

Request a Quote for Group Life Insurance today.