- Andrew Casperson
Why to offer Whole Life Insurance as an Employee Benefit
Whole life insurance is a type of life insurance that provides coverage for the entire life of the policyholder, as long as premiums are paid. While term life insurance provides coverage for a specified period, such as 10 or 20 years, whole life insurance lasts for the policyholder's lifetime.
Offering voluntary whole life insurance as an employee benefit can be an attractive option for both employers and employees. Here are a few reasons why:
Financial security for employees: Whole life insurance provides a guaranteed death benefit that can provide financial security to an employee's loved ones in the event of their unexpected passing. This can be particularly important for employees with dependents or those who have significant financial obligations, such as a mortgage.
Additional retirement savings: Many whole life insurance policies build cash value over time, which can be used as a source of additional retirement savings. This can be an attractive option for employees who may not have access to a 401(k) or other retirement savings plan through their employer.
Lower premiums: By offering whole life insurance as a voluntary benefit, employers can provide access to this valuable coverage at a lower cost than employees would be able to obtain on their own. This can be particularly important for employees who may not have the financial means to purchase whole life insurance independently.
Guaranteed Issue: Access to Life insurance without evidence of insurability is something most people only dream of - working with a provide that has the ability to offer Whole Life coverage with Guaranteed Issue face amounts up to $100,000 is ideal.
Long-term Care Component: Some Whole Life policies offer the ability to protect against the high cost of medical care at any stage of life. LTC policies can be hard to purchase and are very expensive when not made available on a group basis.
Attract and retain talent: Offering voluntary whole life insurance as an employee benefit can be a valuable tool for attracting and retaining top talent. This is especially true in industries where skilled workers are in high demand and companies need to offer competitive benefits packages to attract and retain employees.
Tax advantages: Whole life insurance policies offer tax advantages that can be particularly attractive. The cash value of the policy grows tax-deferred, meaning that policyholders don't pay taxes on the growth until they withdraw the funds. Additionally, the death benefit is generally paid out tax-free to beneficiaries.
In summary, offering voluntary whole life insurance as an employee benefit can be an attractive option for both employers and employees. It provides financial security, additional retirement savings, and tax advantages, while also helping companies attract and retain top talent. Employers who are considering offering this benefit should always work with a reputable insurance provider to develop a plan that meets the needs of their workforce and fits within their overall benefits strategy.