Group Life Insurance Guide
Employee life insurance services to help maximize benefits and minimize cost for employers
Group Life Insurance Testimonials
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What Is Group Term Life Insurance?
Group term life insurance is also known as employee life insurance. It is a life insurance product offered through an employer to all members.
This employee benefit can be offered through multiple organizations such as:
- Unions
- Businesses
- Associations
Individuals do not necessarily have to be employees to be eligible for the benefit.
Rather, they may qualify because they or their employer is a member of the organization.
How Does Group Term Life Insurance Work?
Employers or membership organizations can offer group term life insurance at no cost to the employees. However, the organization will incur some cost.
The benefits offered can range widely up to two years of an individual's salary.
The group term life insurance only lasts for as long as the individual is an employee or member of the organization.
Once coverage ends, sometimes individuals are able to convert the policy to individual coverage, though it is likely to be expensive.
When an employee leaves an organization it is recommended he or she to reach out to an independent insurance agent.
It may be more affordable for the employee to talk with an independent agent to see what additional options are available.
What Are the Benefits of Having Group Life Insurance?
Group life insurance can be very beneficial for a workforce. The three main benefits for an organization include:
- Minimal or no medical underwriting
- Potential to add additional coverage for dependents
- Organization controls the policy and its terms
For individuals with health issues or minimal cash flow, having a life insurance benefit available could be very beneficial.
This benefit will provide some financial protection to the family if the employee passes away.
Is Group Term Life Insurance Taxable?
The Internal Revenue Code Section 79 provides an exclusion for the first $50,000 of group-term life insurance coverage.
As long as it is provided under a policy carried directly or indirectly by an employer, it can be excluded.
As such, the only tax consequences are if the total amount of such policies exceed $50,000.
When it exceeds $50,000, the imputed cost of coverage, excess of $50,000, must be included in income.
Are Life Insurance Premiums Tax Deductible?
Life insurance premiums are not tax deductible for individuals as they are considered a personal expense.
However, for business paid premiums, these may be considered tax deductible for policies owned by company executives and employees.
Is Employee Life Insurance Expensive?
This varies so widely for organizations. It is dependent on:
- The number of employees receiving the benefit
- The overall age of your employees
- The gender of your employees
- Your company's industry
There are a few characteristics that will trigger a more expensive policy.
For organizations that have an older population, unfortunately their benefits will be more expensive as the risk for underwriting increases.
In addition, for those businesses with a significant more amount of male employees versus female employees will pay more.
On average, life insurance is 23% more expensive for males than females.
Another factor is the industry. Certain industries are at higher risk for injuries or death. As such, the underwriting process will take into consideration what line of work you are in.
The higher risk industries are likely to cause a higher cost for the organization. For example, police officers are more likely to pay a higher premium than an accountant.
In the end, the combination of these characteristics will determine the overall cost of your plan.
In some instances, organizations provide health screenings or competitions to help improve their employees' overall health to help lower premiums.
Group Life Insurance Services
Langan Financial Group can help business owners, associations' and unions review group life insurance benefits.
Because Langan Financial Group is not tied to a specific benefits provider we can compare products from numerous companies.
This will allow us to see what product aligns best with your group benefits needs. We will do our best to provide you the best options to choose from.
We provide a collaborative approach when reviewing your options. We will discuss the pros and cons of each policy, so you can make an informed decision.
Chat with a Group Life Insurance Agent
Langan Financial Group's insurance agents have over 100 years of experience servicing insurance policies for individuals and families.
Give us a call at 717-288-1880 to see how our local advisors can help with your insurance policy needs.
Or visit our group life insurance advisor contact page to fill out an inquiry.
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Disclosure: Check the background of your financial professional on FINRA's BrokerCheck. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Cambridge and Langan Financial Group, LLC. are not affiliated. Cambridge Investment Research Advisors, Inc. a Registered Investment Advisor. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC, to residents of: AL, AZ, CO, DE, FL, GA, IA, KY, MD, NJ, NM, NY, NC, OH, PA, TX, VA, WI Cambridge and Langan Financial Group does not offer legal advice. Estate planning services are in regards to your overall financial plan. Always be sure to speak to a legal professional in regards to specific legal matters. Fixed insurance services offered through Langan Financial Group.
Testimonial/Endorsement Disclosure: The testimonials may not be representative of the experience of other customers. The testimonials are no guarantee of future performance or success. All of the testimonials/endorsements are clients with the exception of Steven Martinez of York SPCA. There was no cash nor non-cash compensation for any of the testimonials provided.
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Address: 1863 Center St, Camp Hill, Pa 17011
Phone: 717-288-1880
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