Flexible Plan Of Group Term Life Insurance
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
Flexible Group Term Life Insurance Plan
Overview
Many small businesses find it challenging to offer group term life insurance to their employees due to cost. If your company employs at least five people and lacks a basic group term life plan or a voluntary supplemental plan, the Flexible Group Term Life Insurance might be an ideal solution.
How It Works
The Flexible Group Term Life Insurance is an employee-paid plan designed to provide affordable life insurance where no employer-sponsored program exists. This voluntary plan does not require any financial contribution from employers and is not eligible for those covered under a Beneficial Life Basic Group Term Life Insurance plan.
Policy Premium Options
Premiums for the flexible plan are influenced by the group’s choice of coverage: fully underwritten or guaranteed-issue. If fully underwritten is chosen, a single-page health questionnaire for the group is required at application. If the guaranteed-issue option is selected, no health assessments are necessary, but rates may be higher due to unconditional coverage.
Additionally, rates are affected by whether the group includes tobacco users or opts for a blend of tobacco-free and tobacco users.
Premiums can vary based on age and coverage reduction schedules, allowing coverage to continue past age 65 for active employees. A one-year rate guarantee is available, and employees can convert their policy to permanent coverage if they retire or leave their job. Note that disability premium waivers are not included.
Restrictions
Certain restrictions apply to these policies:
1. Payment: Premiums must be deducted from payroll.
2. Age Limit: Coverage ends when the employee turns 70.
3. Spousal Coverage: Spouses can be covered but cannot exceed the employee’s face value or $250,000, subject to state regulations.
4. Occupational Risks: Those in hazardous occupations are ineligible, and spousal coverage is also subject to occupational approval.
5. Dependent Coverage: Children can be insured for $2,500 or $5,000 up to age 26, with proof of insurability required.
Availability varies by state, so consulting a knowledgeable business financial advisor is recommended.
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