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The Curious Bag
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One of the most common benefits that an employer offers is called "group term life insurance." These plans not only cost less because of the group discount, but usually provided for free from an employer.
Identification
Group term life insurance refers to insurance that an employer purchases for its employees, according to Book Keeper List.
Features
The employer must renew this type of life insurance every year and it has no cash surrender value--meaning the employee does not receive the total paid on the plan if they cancel before coverage goes into effect.
Expert Insight
As of 2009, Internal Revenue Service tax code exempts the first $50,000 of coverage on a group term life insurance plan from taxable income.
Significance
Most people who hold a group life insurance plan get term insurance from an employer, according to the website 360FinancialLiteracy. Typical benefits range from one to two times the persons average annual salary.
Tips
Most group term life insurance plans include the option to carry on the policy after leaving their original employer. However, the premiums skyrocket after this and only the hard-to-insure tend to choose this option.
Source:
BookKeeperList.com: Group Term Life Insurance
Internal Revenue Service: Group-Term Life Insurance
360 Degrees of Financial Literacy: What is group life insurance?
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