Finding and keeping great employees has become a challenge in recent years. One way to keep employee turn over low is to offer great employee benefits such as life insurance. While some view this as an old-fashioned offering for employees, it’s still a valuable benefit you can give your staff.
Let’s take a look at some of the reasons this can be a great investment for your employees:
1). Insurance policies are inexpensive and easy to purchase: group life insurance is cheaper than buying an individual policy. The reason is because a group life policy carries fewer risks for the insurance company when it’s covering a number of people with the same policy. And it’s easy for the business to buy group life insurance bundled with health insurance. This saves money on sales and administrative costs, too.
2). Good benefits package lowers employee turnover rates: if your employees feel they have a valuable benefits package, they’re more likely to stay with the company, especially if they have a family. Life insurance is a huge safety net you can give your employees, which helps them ensure the family is carried for, even if the employee should pass.
Not only that, but a good benefits package is also helpful when it comes to recruiting new employees. You’ll have a choice of better candidates, too.
3). Life insurance provides a safety net and peace of mind: with the addition of a life insurance policy, your employees will have peace of mind that their family will be financially able to survive. Employees who don’t worry are also more productive, too. In fact, employees will know their loved ones will be able to survive financially. As most of the life insurance policies also include some funeral cover benefits too, these can help:
- Replace their lost income
- Cover basic living costs
- Pay household debts, estate taxes and funeral costs
- Fund children’s education
- Supplement retirement income
- These are a few of the reasons offering life insurance can benefit your employees and the business at the same time.
Here are few considerations to keep in mind before purchasing a group life insurance policy:
- Are employees able to request additional coverage, if they want or need it?
- Will the employees be able to keep their life insurance if they choose to leave the company? Will the policy be transferable?
- Will the company cover the cost of the premium, or will the employee be responsible for this? Or could the company share the cost of the premium? If so, what percentage of the cost could it cover for each employee?
- Will employees be able to opt in or out of the group life insurance policy?
- Will age and gender be a consideration to determine eligibility for the insurance?
- Will there be a length of employment period before employees are eligible for benefits?
- Will the life insurance coverage be open to part-time and full-time employees?
- What level of coverage will you offer? For example, some companies offer a life insurance policy that is equal to one or two years of salary. However, others may choose a base amount for all employees, giving the employees the option to buy more coverage at their own expense.
- How will you find a reputable life insurance vendor?
Type of Life Insurance Policies
When you’ve answered the previous questions, then it’s time to consider the type of life insurance policy you’d like to offer company employees.
The most common types of life insurance coverage include:
- Basic term life: this employer-paid coverage is offered for a set period of time, and provides employees loved ones with essential financial provision.
- Supplemental term life: employee-paid coverage, which allows employees to purchase additional protection as they need.
- Dependent term life: protection for an employee’s spouse, civil union partner, domestic partner and/or eligible children.
Look for policies that offer competitive group rates, guaranteed issue with no medical questions or medical exam required, and policies that can be deducted via payroll.
Offering your employees life insurance is not only a financial benefit for them, it’s also an investment for the company. You’ll lower employee turnover rates, while attracting better qualified job candidates.