Life and Accidental Death & Dismemberment (AD&D) Plans
Group-term Life Insurance
Group-term life insurance is a common employer-sponsored life insurance plan offered to employees only. Coverage may be employer- or employee-paid. Often, employers offer a specified benefit (flat fee or percentage of salary) that is cost-free for employees, then offer the option for employees to purchase additional coverage.
Because spouses and dependents are not covered under this type of plan, some employers also offer a separate voluntary plan to cover these individuals if employees choose.
This coverage is generally very affordable for employers, because the group plan spreads the risk over many people so premiums tend to be low. Plus, if you take the time to educate employees about the importance of life insurance, offering this coverage can increase employees’ appreciation of their benefits package.
Group-term life insurance is also advantageous for employees. Employees get coverage that is either employer-paid or at least cheaper than a policy purchased in the individual coverage market. Another big advantage for employees is that most group-term plans do not require health assessments. Employees purchasing coverage individually often face premiums contingent on the results of a medical exam – or may even be denied coverage on that basis.