Some employer’s offer term insurance to their employees as an employee benefit. Usually the benefit can range from a $5,000 to $50,000 flat amount or up to 5x an employee’s annual salary. The term insurance is usually only provided to the employee while they are working and employed at the company.
Life insurance is a unique asset because of its potential high yield and tax favored benefits. It is used to solve some of life’s perplexing problems. A few general purposes of life insurance are to create an estate, replace income, pay death taxes, pay estate settlement costs, fund a business transfer at death, fund college for children, pay off a mortgage or loan, to replace a key-person, and pension maximization.
Below are some of the benefits of Group Term Life Insurance:
- Usually guaranteed issue up to certain limits for all employees. Medical questionnaires are usually not required.
- Designed to provide life insurance coverage for a specific period of time. To continue coverage after the specified term has elapsed, you may need to reapply for a new insurance policy once you leave employment. At that time, the insurance company will again consider your health when determining whether to grant you, the insured, the insurance, unless you have an option to convert to a permanent plan without further evidence of insurability. Insurance may not be available after attaining a certain age.
- Typical term insurance pays a guaranteed death benefit to your beneficiary(ies) only if you die during the specified term (usually while employed).
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