Group Life Insurance

Group Disability Plans

Group Term Life Insurance is a key element in any employee benefits package:

• Studies show that many employees no longer own individual life insurance and instead rely on the coverage's available to them through their employer.
• Employer-paid group life and accidental death & dismemberment (AD&D), coupled with supplemental term or permanent life insurance, provides a foundation of planning for your employees, at affordable rates with ease of underwriting.

An employer is allowed to provide up to $50,000 in group term life insurance to employees, tax-free. Offering life insurance face amounts of two or three times salary is also common. The drawback is that the premiums paid by the employer must be included in the employees taxable wages.

• Many employers offer a supplemental life plan, either with term insurance or permanent coverage.
• Life insurance premiums are not pre-taxable under a Section 125 Plan.

Group term and voluntary life insurance is made available on a simplified issue basis, sometimes with guaranteed issue limits. This is especially attractive to employees who might otherwise be uninsurable, depending on group size. double indemnity, AD&D, common carrier provisions, and travel accident coverage can also be arranged on these plans.

Group disability helps your employees with the sudden loss of income that can be caused by a sickness or an accident. Typically, long term disability plans provide for 60% of gross wages and compensation*, up to a maximum monthly figure, payable after the completion of an elimination period. Short term disability can be used to bridge that elimination gap. Benefit periods can range from 5 years up to an industry–standard "to age 65" period. Many will provide benefits due to maternity, and most are guaranteed or simplified issue, depending on group size.

Long term disability should be 'dovetailed' with short term benefits. This is extremely important coverage, especially for owners, partners, and others directly responsible for the health of a business.

An important factor to consider when choosing a long term disability (LTD) policy for your employees is the definition of disability. You should purchase the policy that has the best definition of disability available within your price structure. An "own–occupation" definition is considered to be the best, but not always available

For employers who wish to provide this coverage but are unable to afford the premium, short and long term disability coverage is available to your employees on a voluntary basis, employee–paid, at group rates. This is ideal for the employer who wishes to provide enhanced employee benefits at no cost to the company.

• Employer–paid disability plans are always taxable to the employee upon receipt of benefits. If an employee is required to pay taxes on those wages, he will end up with around thirty cents on the dollar. There are ways to eliminate this tax issue, however, which should be discussed in detail before the implementation of a plan.