Life insurance is a huge incentive to offer to your employees, especially those with spouses or children. Moreover, it can be an easy and inexpensive benefit. Ease of administering the benefit means that you do not have to keep monitoring the insurance plan. There are various types of Life insurance plan policies. Below are the most common types.

• Group term life insurance

This kind of coverage is inexpensive and tax-free and only lasts for as long as the employee is working within your company. It mainly works for older employees who have a limited tenure with your company. For example, for a 40-year old employee, you may only need to part with approximately 2500 INR in a month. If you work with many young employees, it may not be a feasible option.

• Permanent  life insurance

A permanent life insurance plan is issued to individual employees and provides a benefit upon death, payable to the beneficiary. The employee can also build cash value using the plan, money which they can access during their lifetime to cater for living benefits such as policy loans. There is no minimum requirement for participation or a benefit-waiting period. This kind of insurance suits young employees who have high earning power, to enable them to accumulate cash over time. 

• Group accidental death and dismemberment (AD&D)

This insurance plan pays the employee or next of kin in case an accident occurs that causes them to lose parts of their body or die. Accidental death insurance makes sense if you work in high-risk industries such as construction and manufacturing, where employees continuously handle dangerous objects. 

• Business travel accident insurance

Buying this insurance policy is a feasible option if your employees are often on the move for business purposes. 

• Split-dollar life insurance plan for top employees

This plan involves senior employees getting insurance coverage by using your funds. You will invest those funds and give your top employee the predetermined payout when they die while you retain the premiums. You also get back the premiums if the employee stops working with you. This kind of insurance serves as a good incentive for top employees.

Various ways to offer life insurance to employees

You need to decide from where you will get life insurance, who among your employees qualifies to get it, and how to get it rolling. You can get your insurance from a professional employer organization, HR benefits software, an insurance broker, or an insurance company of choice. 

You can offer group term life insurance to all your full-time employees as you may benefit from lower rates if you are insuring more people. For key employees, you can give special benefits so long as they do not appear discriminatory. 

Employee cooperation

Your employees will need to provide true and accurate information about their beneficiaries for the sake of compensation. Employees can choose several people as their beneficiaries, and they can also update that information yearly. In some cases, employees may need to provide medical records as proof of insurability, but the group term life insurance does not require it.