Small group life insurance is an important part of any business’ financial plan. It can provide security for your employees and the people they love when they are no longer around. The money their dependents will receive, “the death benefit,” is usually federally tax-free and can be used by their beneficiaries for a variety of things, such as burial costs and estate taxes, providing a lifetime income to a loved one, or ensuring that their children have money for college. Plus, small group life insurance can help ensure that their loved ones are not burdened with debt, or forced to sell assets to pay outstanding bills or taxes.
If something happened to your employees, would the financial future of their loved ones be protected? Help ease their minds with coverage that they and their family can rely on. As an independent insurance consultant/broker, Shelton Insurance has relationships with a vast scope of insurance markets which enables our office to evaluate insurance products that are perfect for what you are looking for and ultimately, what you need for your business.
There are two main types of small group life insurance plans to consider; Small Group Term Life Insurance and Small Group Permanent Life Insurance.
With small group term life insurance, your employees pay premiums for a specified term (usually 20 or 30 years), and if they die within that term, the insurer pays their survivors a benefit. But term insurance is like car insurance: if they stop paying premiums, they lose the insurance.
With permanent life insurance, their insurance is valid as long as they’re paying premiums. In addition, some of the money paid in premiums accumulates as a cash value. They can use this cash value to save for retirement, or even take loans against it throughout their lives.
Within permanent life insurance, you can choose to offer either whole life insurance or universal life insurance. The big difference between whole and universal is that whole life insurance premiums are fixed for life while universal life insurance allows your employees to adjust the premiums and death benefit as they go.
With whole life insurance, after several years some of the money they’ve paid is theirs to keep—even if they stop paying premiums. This is called the policy’s cash value. Nobody likes “throwing money away” on life insurance, so the prospect of combining life insurance policies with a way to save tax-deferred money for retirement is attractive.
The key to understanding a whole life policy is the internal rate of return— that’s the return on the policy after taking all the fees out. As seasoned small group life insurance brokers, we can help you understand what that return would be for your employees and create a small group life insurance quote to meet your business’ needs.
Ready to get small group health insurance? We’re here to listen to your questions and help you get answers. Sometimes talking over the phone is easier. Call us at (831) 637-8941.