Group Term Life Insurance: FAQ’s

Many employers provide employees with employer-paid group-term life insurance benefits or arrange for employees to purchase group-term life insurance benefits. Internal Revenue Code (Code) Section 79 includes the tax rules for employer-provided group-term life insurance. Code Section 79 provides that an employee may exclude up to $50,000 of employer-provided group-term life insurance coverage from his or her taxable income. This tax exclusion applies only to insurance on the life of the employee. It does not apply to insurance on the life of…

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Educating Employees: Importance of Life Insurance

Educate Employees on the Importance of Life Insurance Although life insurance is one of the most common employer-provided benefits, many employees do not appreciate its value. As an employer, you are well-positioned to educate employees on the importance of this coverage. What’s in it for you? Educating employees about life insurance can yield higher enrollment, greater appreciation for your benefits package and increased loyalty to the company. Many employees are not financially savvy, but are interested in learning. Financial education from their…

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Return of Premium Life Insurance

Return of Premium Life Insurance Life insurance is a valuable component of a benefits strategy, as it has been shown to be held in high value by employees. According to the U.S. Bureau of Labor Statistics, of the 58% of private industry workers who are offered life insurance benefits by their employers, 97% choose to enroll. Employers also commonly expand life insurance on a voluntary basis, owing to the wide array of insurance policy options and employee needs. Given this information, it’s…

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Split-dollar Life Insurance

Split-dollar Life Insurance Split-dollar life insurance is an arrangement between an employer and employee to essentially split the cost and benefits of a life insurance plan. The plan purchased is generally a type of permanent coverage with a cash value element. Typically, the employer pays the part of the premium that represents the cash value and the employee pays the balance. Upon the employee’s death, the employer is reimbursed for the premiums it paid throughout the life of the policy. The employee’s…

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