Life Insurance

Life insurance is a form of insurance that pays out money upon the death of the insured covered in the policy. A life insurance policy is a contract between the insured and the insurance company wherein the insurance company agrees to pay an agreed upon sum of money to the insured's named beneficiary so long as the insured's premiums are current.

People take out life insurance policies for a number of reasons. Life insurance provides security to family members upon the loss of a loved one. The death benefit received from a life insurance policy will assist in overcoming the burden of a tragic loss.

The most common purpose of life insurance is to protect the finances of one's family or friends in case of a wage-earner's death, but that's not its only purpose.

Life insurance can be used:

• To hire childcare to replace a home-maker's contribution
• For estate protection
• For mortgage protection
• To fund retirement
• To protect a business against the loss of a key employee

Life insurance can be purchased by individuals, but is also offered as a perk by many employers. Often times, large employers and government employers offer group life insurance at no cost to the employee. Should the employee wish to obtain additional life insurance from the employer's insurance company, they can usually do so at reduced rates. The cost of life insurance varies depending on such factors as the insured's age, health, and occupation.

Life insurance continues to be the foundation of most competitive benefit packages. It offers employees financial security, strengthens an employer’s ability to attract new talent, and helps producers meet clients’ needs for expanded voluntary benefits.

There are good reasons why so many people take advantage of this employee benefit.

• It's affordable — Group life insurance provided through an employer is a great way to fill gaps in coverage and the buying power of a large group helps keep rates affordable.


• It's easy — Buying life insurance at work is convenient. Employees can pay premiums through payroll deduction. Choices under a group life insurance plan are often tailored to salary or job classifications to simplify options and make them easier to understand.


• Simplified underwriting — Depending on the design of the employer’s plan and the type and amount of coverage elected, employees may be able to buy insurance without answering health questions or taking a medical exam. Most plans offer a certain level of guaranteed coverage for new employees and at the time of salary increases or life events.


• There's no pressure — Online self-service options for enrolling and making changes to coverage are especially attractive to busy executives and tech-savvy employees.


• Coverage follows the employee — When they leave, the group employees often have the option to maintain their coverage by paying premiums directly to the carrier.


• Opportunity to supplement savings — Today’s employees are taking a more active role in planning for their future and are aware of the need to shoulder their own health care costs in retirement. Cash value life insurance offers a way to supplement other savings plans to fill the gap between where they are and where they want to be financially.

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