Are you not sure about the employee benefits of a life insurance policy? Here’s all you need to know! Offering life insurance benefits to employees is a great addition to the overall benefits package. Although offering this policy isn’t required by law, it gives an additional incentive to your employees and makes them feel valued and appreciated. If you have decided to offer life insurance benefit to your employees, then you’ll have to determine a few things about coverage, such as:

• Who should be covered?
• Which type of life insurance benefits do you want to offer?
• How much do you wish to pay for it?

Life insurance policy can benefit both the employee and employer because you can get lower rates for insuring a group compared to individual policies. If you have decided to go ahead with this benefit, then you’ll have to address the questions mentioned above. Moreover, you’ll also have to figure out which vendor to pursue and how to administrate the policy properly. Keep reading to learn more! Who should be covered? When you have made the decision to offer life insurance to your employees, the first thing you need to decide is which employees will receive this coverage. You have several options. You can offer group-term life insurance coverage to all your employees. This is especially an excellent option when you’re getting lower rates for a bigger group. If you want this benefit to be exclusive for a few key employees, then you cannot deduct the premiums for federal taxes without meeting certain nondiscrimination requirements. What are the nondiscrimination requirements?   Nondiscrimination requirements are imposed to discourage employers from providing exclusive benefits only to the highly compensated employees or the benefits that prevent the lower compensated employees from participating due to a high cost. To ensure that you comply with nondiscrimination requirements in the form of a group life insurance, you’ll have to meet the following conditions:

• The insurance plan must benefit at least 70 percent of your employees.
• Minimum 85% of all employees participating should not come under the category of key employees.
• The insurance plan needs to benefit employees who qualify under a classification that is not discriminatory against non-key employees as per the IRS regulations.

If you're offering group-term life insurance, then you can offer the policy to a group of employees in a non-discriminatory manner if the distinction is based on any of the following factors:

• Marital status
• Compensation
• Length of service
• Job duties
• Participation in a pension, stock bonus, profit-sharing, or health plan
• Other employment-related factors

Are you looking to buy group-term life insurance for your employees? Contact us for the best offers!