So what is Group Life Insurance? Let's begin there. "Here are some of the most frequently asked questions we hear. If you're considering a group benefits partner change this Fall, you'll want to be brushed up on some of these," says Ben Fox, Group Benefits Manager at
CH Insurance:
Group life insurance is a type of life insurance in which a single contract covers an entire group of people. Typically, it's the policy an employer has in place for all its' employees. Independent agencies, like CH Insurance, offer group policies through different carrier partners depending on premium needs and preferences.
Can group life policies carry a cash value? No, unlike some, group policies do not carry a cash value. However that's also reflected in the premiums which tend to be significantly lower than policies with a cash value.
Is group life insurance taxable? Employer-paid life insurance may have a tax cost.
The premium cost for the first $50,000 of life insurance coverage provided under an employer-provided group term life insurance plan does not have to be reported as income and is not taxed to you.
How does group life insurance work if I'm an employee? Group term life is typically provided in the form of yearly renewable term insurance. When group term insurance is provided through your employer, the employer usually pays for most (and in some cases all) of the premiums. The amount of your coverage is typically equal to one or two times your annual salary.
How are Group Insurance premiums calculated? All of these factors feed into the calculations, coverage, benefits, and premiums. If we look at a typical health insurance plan for a family, an employee will generally contribute: In small groups — Around 35% of the premium. In large groups — Around 25% of the premium.
Check back next week as our own Joe Courcy, Group Benefits Senior Account Executive at CH, talks about Open Enrollment and the opportunity to do a health check on where your company stands in preparation for what is always one of the busiest times of year for your HR Department.