HomeLife InsuranceThe Best Life Insurance Policies for Employees (COVID-19 Coverage)

The Best Life Insurance Policies for Employees (COVID-19 Coverage)

Employees in the workplace

Creating a benefits package for employees that is balanced and fair can be a complicated process. Of course, focusing on the needs of employees is essential, but there are plenty of factors to weigh when putting the package together. One major factor includes the company’s budget, which can negatively impact the ability to acquire a juicy benefits package if there are not many affordable options available.

Providing a benefits package that offers the best term life insurance with living benefits for employees should be one of the few determining factors when compiling a benefits package. Still, for some companies, that is not a luxury. Paid time off, on-site childcare, and other employee perks also play a role in selecting significant parts of a benefits package like life insurance. 

However, providing an acceptable life insurance policy is always an option when employers know how and where to look. No matter the budget and determining factors, life insurance can be a factor even if it is the best of the basic life insurance policies. 

Why You Should Offer Life Insurance Policies for Employees

Families who live paycheck to paycheck can end up struggling financially within a month after the death of someone who brought in the primary source of income. This is especially true if the family was unable to build savings. Even if they strictly followed tips for living life responsibly and put money aside for a rainy day, it is likely the funds saved is not enough to support them for up to a year.

Having a life insurance policy can provide your employees with a sense of peace and confidence for their family’s well-being should something happen to them. Besides being a humane and kind thing to offer, it also allows your employees to work their best because they are not as stressed over their family’s livelihood. It also creates a sense of loyalty toward the company, making them less likely to find a different company that offers better benefits. 

Beyond those reasons, offering life insurance policies for employees can help you obtain quality employees, enhance your company’s culture, and could directly tend to your business’ needs.

Group Life Term Insurance

Group life insurance is a great option, especially for small businesses working with a tighter budget when configuring their employees’ benefits package. As it sounds, group life insurance consists of one single contract covering an entire group of individuals. The most common form of insurance that is offered with group life insurance bundles is term life insurance.

With group life insurance, the group members can get coverage at a lower rate in comparison to how much they would pay if they purchased a policy individually. With businesses losing revenue because of COVID, the way you structure your life insurance for your business should depend on a budget. Here are some ways you can offer group life insurance to your employees:

  1. If your budget permits, you can offer group life insurance with your benefits package. The employee will not have to pay anything as the company pays the full cost.
  1. For tighter budgets, you can offer life insurance as an optional portion of the benefits package. The employee will pay either all of the policy’s cost or a part of it as you will cover the other part.
  1. Another option for tight budgets is to pay for a certain amount of life insurance coverage for each employee and give them the opportunity of increasing the coverage amount at their own expense. 

Before you settle, you should pick a small business attorney to help make the best decision when considering group life insurance for employees. An attorney could help you avoid making a decision that could negatively impact your businesses’ assets if the worst-case scenario were to arise. COVID-19 is actively providing demonstrations on how the worst-case scenario could happen.

Other Types of Life Insurance Benefits to Offer

Many employers offer group-term life insurance as an employee benefit because it is an affordable option when considering the advantage of a tax deduction. Business owners who have at least 10 full-time employees can get up to a value of $50,000 in insurance as tax-exempt for the employees.

However, with some insurance providers raising prices for all their insurance options among COVID, the tax exemption may not benefit some companies. With that in mind, here are other types of insurance that you can offer outside of group-term life:

  • Business travel accident insurance: insurance coverage that protects an employee’s death while traveling on business and potentially covers the instance that death was caused by traveling on business.
  • Group accidental death and dismemberment: also known as AD&D, it pays benefits to an employee’s benefits if death occurs due to an accident or if they lose a limb (arm, leg, etc.).  
  • Split-dollar plan: this coverage involves a written agreement between an employee and employer that outlines how both parties will share the premium cost, cash value, and death benefit of a permanent life insurance policy. 
Workplace meeting

Whole Life vs. Term Life

Though term life insurance is the most common form of insurance when businesses purchase group life insurance, whole life is also an option. Term life insurance policies run for a certain period of time, and once that time ends, the benefits stop. Alternatively, whole life insurance continues as long as the premium is paid and offers cash value. 

Term life insurance is cheaper than whole life insurance, which is why most business owners opt for term life instead of whole life. However, some term life insurance options offer living benefits similar to the cash value that whole life insurance provides. 

Being that there are a lot of variables at play when choosing the right policy for your business, working with a skilled insurance agent can help you get answers to important questions about insurance. An agent can help you assess the needs of your company and employees while simultaneously evaluating the different rates and options available to make the best decision.

Remember to take the necessary precautions to keep yourself safe from coronavirus, and one way to protect yourself is finding the best life insurance policy. 

Imani Francies writes and researches for the life insurance comparison site, She earned a bachelor of arts in film and media and specializes in various forms of media marketing.



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