Group Term Life
Accidental Death & Dismemberment
Why Offer Your Employees Life and AD&D Insurance
Regardless of the type of business you're running,
offering group-term life insurance
is a great way to give your employees and their families additional financial protection in the event of a loss. Group term life insurance very often also includes accidental death and dismemberment coverage meaning your employees can also be entitled to a benefit if they become dismembered due to any type of accident covered by the policy.
Group Term Life Insurance
These types of policies typically are paid entirely by the employer and cover all benefits-eligible employees for some specific benefit amount. The life benefit is usually either a set dollar amount (e.g. $50,000) or it can be a multiple of an employee’s salary. Many policies, especially those that provide a benefit that is a multiple of salary, will have a “Guaranteed Issue” amount of coverage, meaning that no “evidence of insurability” (i.e. proof of good health) is needed for coverage up to that amount. The insurer can require employees to provide evidence of insurability for any benefit amount beyond the guaranteed issue (GI) amount. Most policies will often have a gradual reduction in the benefit amount as enrolled employees get to, and beyond, retirement age.
In addition, group term policies can often have portability and/or convertibility. When they do, that means if an employee leaves the company or is otherwise terminated from the group life policy they can potentially continue it either through portability, which lets them continue the policy on their own while they pay for it themselves, or convertibility, which lets the employee convert their temporary term policy into a permanent one.
Many policies can also have a “waiver of premium” clause that allows eligible employees under the age of 60 to remain enrolled without having to pay the life insurance premium if they become disabled. Similarly, in the event a covered employee has a terminal illness and their death is imminent, many policies also have an “accelerated death” benefit which gives them access to some or all of the life benefits prior to their actual death.
Voluntary/Supplemental Life and AD&D
While employers typically cover the cost of standard group term life insurance policies, some organizations may choose to offer voluntary or supplemental life coverage. In such cases, employees are responsible for the entire payment, either as an addition to the employer-funded policy or as an alternative to it.
The main differences when compared to standard group term life insurance are that the employee opts for incremental amounts of coverage rather than it being a predetermined amount and employees can often add coverage for their spouse/domestic partner and sometimes even for their children.
One big advantage to employees of voluntary/supplemental coverage can be that it also often has a guaranteed issue amount so if they or their dependents are not of good enough health to get an individual policy on their own they would still be able to get up to the GI amount on the group voluntary life policy and any coverage is better than no coverage.
How Accidental Death & Dismemberment Insurance Works
AD&D insurance provides a valuable layer of protection, offering financial peace of mind in the face of unexpected accidents.
Accidental Death
In the tragic event of the insured person's accidental death, the policy provides a lump-sum payout equal to 100% of the basic life amount. Unlike traditional life insurance, which covers death from various causes, AD&D specifically addresses accidental fatalities.
Dismemberment
AD&D insurance also extends coverage to partial benefits if the insured suffers the loss of limbs or becomes paralyzed due to an accident. The policy outlines specific amounts for these benefits based on the severity and type of dismemberment.
The importance of policy reviews:
Build a Custom Benefits Package with AEIS
At AEIS, we always take the time to learn as much about our clients as possible for a simple reason. We want to help you design the custom benefits package that works for you and your people - period. By putting together a custom package that is properly aligned with your long-term goals, we can help you both attract and retain the talent you need to make that vision a reality. We won't force you into a "one size fits all" box when it comes to insurance that, in truth, doesn't really exist.
If you'd like to find out more information about voluntary employee life and AD&D insurance, or if you'd just like to discuss the mechanics of your own business with a team of professionals in a bit more detail, please don't hesitate to contact AEIS today.
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