Robert Carducci, RRC®
Financial Planner
Financial Planner
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Group Life Insurance Benefits
When defining solutions that truly fit your business needs we will look at:
– Stronger service that works with you. We work with you to reach your service requirements.
– Fitting your flexible needs. Regardless of your group’s size—from five to thousands—we can design a benefits plan that fits.
The following areas are generally considered in a benefit plan relating to Group Life Insurance.
Employee Basic Life
Basic life insurance pays a contract-specified amount in the event of the death of an employee from any cause. Premiums paid by the employer on behalf of the employee are a taxable benefit; however, benefits received are non-taxable. Some of the main features of a basic group life plan are:
Benefit Schedule: The amount of coverage is generally based on either the employee’s earnings or salary (e.g. 1 x salary, 2 x salary, etc. ) or a flat amount from $25,000 to $500,000.
Non-Evidence Maximum (NEM): This is the minimum amount of coverage for which all employees are eligible (subject to income requirements). This is a great benefit for employees who may not qualify for an individual life insurance policy.
Waiver of Premium Continuance of Life Insurance coverage while premiums are waived is generally available to employees age 65 or younger, under the regular care of a physician, who become totally and permanently disabled for a period, typically 4 months.
Waiver of Premium Conversion Privilege If a plan is to terminate when an employed no longer qualifies for coverage as an employee, the conversion privilege allows the policy to be convertible without medical evidence to a permanent plan owned by the insured according to plan specifics.
Dependent Basic Life
Dependent Basic Life is a flat coverage offered to the spouse and dependent children of an employee; the spouse’s coverage is generally higher than that available for children for whom it becomes effective at live birth or 14 days after birth and continues until the child is 21 years of age (25 years if in full-time attendance at school or university).
Employers can share paying the premium, or have employees entirely pay; the benefit is payable to the covered plan member upon the death of the dependent.
Benefit Amount: Generally $5,000 is the face amount of coverage for a spouse; $2,500 per a dependent child; or $10,000 for a spouse and $5,000 per dependent child; while higher amounts may be available.
Employee (and Dependent) Optional Life Benefit
This benefit allows employees and sometime the spouse and/or the children (referred to as Dependent Optional Life); to supplement and pay for more life insurance coverage over that which is provided by their benefit plan (some as high as an extra $1,000,000). Medical evidence is required and coverage usually ceases at age 65 or the employee’s retirement.
Accidental Death & Dismemberment (AD& D)
This benefit provides protection where an employed plan member incurs a loss, or loss of use of: life, limb, sight, hearing, and/or speech due to an accidental injury (usually on a flat amount of coverage e.g. $25,000, $50,000, $100,000 or as a multiple of salary, e.g. 1 x salary, 2 x salary). This benefit may also be referred to as “double indemnity insurance” as it doubles the benefit for plan members who die as a result of an accident. 24-hour coverage is common covering accidents that occur both on and off the job; though coverage can be provided on a 24-hour non-occupational basis.
AD & D frequently covers both “loss”(meaning an actual severance) and “loss of use”(meaning total and irrecoverable loss of use).
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Life Insurance policies vary according to contract terms. Please read any Life Insurance policy contract provided, or the segregated fund summary information folder prospectus before the time of purchase. Full details of coverage, including limitations and exclusions that apply, are set out in the policy of insurance. Commissions, trailing commissions, management fees and expenses may be associated with segregated fund investments which may not be guaranteed and their market value changes daily and past performance is not indicative of future results. A description of the key features of a life insurance policy, a segregated fund; and any applicable individual variable annuity contract is contained in information provided by the company from which it is purchased. Talk to your advisor before making any financial decision. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors. The information provided is accurate to the best of our knowledge as of the date of publication and is general in nature, intended for educational purposes only, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors. Rules and their interpretation may change, affecting the accuracy of the information.