What is life insurance?
Life insurance benefits offer a financial safety net for your loved ones in the event of the unthinkable.
These benefits provide a lump sum payment to your employees’ beneficiaries in the event of your employee’s passing. Intended to help lessen any financial burdens, these funds are free to be used however they see fit, but often go towards funeral arrangements, unsettled debts, or any outstanding bills.
By alleviating financial worries, life insurance can help loved ones focus on what’s most important during a difficult time: coming together with loved ones, mourning, and beginning the healing process.
The most common type of life insurance offered by employers is group life insurance. Group life insurance generally covers all or select members of your employee group. In most cases, an employee is only covered during the time they are employed with a company or organization, which is a form of term life insurance.
Usually, group term life insurance is partially or fully covered by the employer. It’s generally far cheaper than individual or private life insurance and often comes with options for employees to add additional coverage if they so choose.
How do employees use life insurance?
When the unfathomable happens, there are certain obligations that will still need to be handled. Sure, nobody wants to have to think about these things at a time like this, but it is what it is.
Fortunately, making a life insurance claim is relatively straightforward. Here’s how it works: Beneficiaries will need to notify the insurance company and send a certified death certificate (not a copy) to the insurance company for their records. They may also need to include additional documents to verify they claim meets all the requirements. The sooner the insurance company has what they need, the sooner they can issue payment. Payment is usually distributed within about a month, or sometimes even a week.
How do life insurance benefits impact employees?
Through these plans, your employees have the peace of mind of knowing that if something does happen to them, their loved ones will be taken care of.
With the support provided by life insurance, the bereaved can take the time they need to process their loss without worrying about money. This financial safety net can help them keep their home, pay rent, pay bills, or take care of children.
These benefits are often an important box employees want to check, especially if they work in potentially hazardous occupations.
Why should employers offer life insurance?
Life insurance takes a major stressor off your employees’ minds, allowing them to focus on the more important and present things in their lives, including their work.
Offering your employees life insurance is a way for employers to show they value employees beyond their work. At roughly $0.06 per hour of work for each employee, it’s a thoughtful, low-cost way of showing your employees that you don’t just care about them, but their families as well.
With 85% of employers offering life insurance benefits, it’s also incredibly important in retaining and attracting top talent.