Life Insurance can be offered as an employer paid benefit or on a pure voluntary basis. Voluntary plans allow the employee to purchase additional life insurance coverage through the convenience of payroll deductions. The plans provide guaranteed issue amounts (no health questions) and are completely portable.
Employee Advantages of Voluntary Life Insurance
Most employees have a need for additional life insurance protection above and beyond the basic group term insurance that employers provide. Where do these people turn? Many simply do not look for this additional coverage because they don’t know where to go, are confused by insurance, or are just intimidated to invite an insurance agent into their home.
Most people would agree that inviting a life insurance agent into their home is not on their top ten list of things to do. The fact is most people are uncomfortable with an agent coming into their home for fear they will be pressured. How do they find a good agent? Are they getting sound advice? Is the company and its products reputable?
When the employer sponsors a voluntary life insurance program:
- Employees feel comfortable that the employer has looked at the market and chosen a quality company and product.
- Holding group meetings alleviates the fear of being pressured.
- Employees have access to professional advice they most likely would not get on their own.
Types of Plans
To be very general, life insurance can be broken down into two types of policies – term insurance and cash value type policies. Term coverage allows your employees to purchase pure death benefit coverage at inexpensive group term rates. Cash value programs, such as whole life and universal life, provide several additional benefits including the tax-deferred accumulation of cash.
Choosing which insurance carrier to use is extremely important when looking at voluntary life programs. Cash value life insurance policies are a long-term proposition. The insurance carrier must be stable with a superior track record and strong financial ratings to insure that the money your employees put into these plans is there when they need it.
The choice of carriers can also mean the difference between a program that functions smoothly and one that becomes an administrative headache. Many new carriers are rushing to enter the market to sell voluntary products. Broad Reach Benefits only utilizes insurance carriers that have a proven track record with the technical capabilities to handle these programs.
- Paid-up life insurance — Most group life insurance terminates at retirement. These plans can provide benefits after retirement. Policies can be paid-up providing needed coverage with no more premium payments.
- Portable Benefits — When employees leave employment they can not take their group term insurance coverage with them. Voluntary plans allow your employees to retain their coverage at the same rates if they leave your company. Billing is then handled directly between the insurance carrier and the employee.
- No Medical Questions — Most programs we offer provide guaranteed issue life insurance up to a specified amount. This means employees and their dependents can qualify for coverage immediately, even if they have significant health problems that would otherwise exclude them from getting coverage. Additional coverage can also be purchased on a simplified underwriting basis.
- Low Cost Group Rates — Purchasing through a group provides discounted rates.
- Convenience of Payroll Deductions.
- Savings — These policies can provide additional money for retirement income, college funding and emergency funds.
Voluntary life insurance programs provide your employees with a quality product on a guaranteed issue basis at low group rates. The convenience of payroll deduction and the professional advice they will receive make these programs winners for both the employer and the employee.