|
About Group Life Insurance
An additional benefit which can be provided to employees of companies in California, group life insurance can easily be added to a health insurance policy. This is becoming an increasingly popular benefit, especially as employees age and begin to think seriously of supplementing their financial future. As a California employer, this is certainly an option you will want to entertain for all of your staff, but definitely for your longest-term, most trusted employees. Most companies will provide for a token amount of group term life insurance included with other insurance benefits, which can be increased if the employee wishes to pay for the extra coverage. Another option is to provide this benefit based on each employee’s salary, which means top management will receive a greater amount of coverage.
Get a quote for our California Group Life Insurance
Types of Life Insurance Policies
There are two major types of policies which most businesses will select: term life insurance and cash value life insurance.
Group term life insurance, California rated, provides coverage for a specific period of years, such as a decade, or until the covered member reaches a specific age. Face value of the policy is paid to the named beneficiary upon the member’s death, should it occur during this defined period. The cost of this insurance increases as members age.
Premiums are charged as either guaranteed maximum or current. You will pay a lower rate for current premiums, but they are subject to increase at the discretion of the insurance company. Guaranteed maximum premiums are just that – there is an amount beyond which the insurance company cannot raise the rate.
There is no cash value to term life insurance. Should the policy lapse, no money will be paid out.
Disability insurance can also be added to California group life insurance policies. Such a provision supplements the finances of a disabled employee by replacing lost income from the inability to work.
Cash value life insurance, however, does accumulate a cash value in addition to death benefits. Although the rates are more expensive than for term life insurance, the cash value plus interest will be paid to the policy’s owner before death and upon surrender. Be sure to examine how the cash value is determined and the guaranteed value of the policy. Early surrender will result in significant penalties, so this is generally not a good option for employers to provide. However, loans can be drawn against the cash value and there may be some tax benefits, so it might make sense to use such a policy for the business’ principal officers.
In the state of California, group life insurance agents are licensed. By using a professional agent, you can rest assured that you have received the best care and information on all available companies and policies. Your agent can also direct you and your firm towards a well-established life insurance company with an excellent service rating. Due to recent reports of high-risk investment strategies used by some insurance providers, you will want to ensure that the company you do business with is financially secure and stable.
|
