Employee Benefits
Group Life & AD&D Insurance — Protecting What Matters Most to Your Employees
Group life and Accidental Death & Dismemberment (AD&D) insurance provides financial protection for employees' families at a fraction of the individual market cost. It's one of the most meaningful benefits an employer can offer — and one of the most affordable.
Group Life Insurance — The Basics
Term Life at Group Rates
Group life insurance provides a death benefit to an employee's beneficiaries if the employee dies while covered. Group rates are significantly lower than individual rates because the risk is pooled across all employees.
Benefit Amount Options
Most employer-sponsored group life plans offer a flat benefit (e.g., $50,000) or a multiple of salary (e.g., 1x or 2x annual salary). Salary multiples are more meaningful and more valued by employees.
Guaranteed Issue
Group life is typically guaranteed issue — employees are covered without medical underwriting, regardless of their health history. This is a significant advantage for employees who may not qualify for affordable individual coverage.
Portability & Conversion
When employees leave, group life coverage typically ends. Portability allows them to take the coverage with them at group rates; conversion allows them to convert to an individual policy without a medical exam.
Accidental Death & Dismemberment (AD&D)
AD&D pays a benefit in addition to life insurance if death or covered dismemberment results from an accident. Dismemberment benefits pay a percentage of the principal sum for loss of limb, sight, hearing, or speech.
Beneficiary Designations
Employees designate beneficiaries who receive the benefit at death. Employers should facilitate beneficiary designation at enrollment and remind employees to update designations after major life events.
Why group life is a foundational benefit
Life insurance is one of the most meaningful things an employer can provide — and it's remarkably affordable at the group level.
- Low cost (often $0.10–$0.25/month per $1,000 of coverage)
- Guaranteed issue — no medical exam for employees
- Valuable for employees who couldn't afford individual coverage
- Widely expected as part of a standard benefits package
- Tax-free benefit up to $50,000 per employee
Supplemental Life Options
Beyond basic employer-paid life, many plans offer supplemental life that employees can purchase at group rates.
- Employee supplemental life (1x–5x salary)
- Spouse life coverage
- Child life coverage
- Higher guaranteed issue amounts available
- Evidence of Insurability for higher amounts
Plan Design Options
Flat Amount Plans
A fixed death benefit for all employees regardless of salary — e.g., $25,000 or $50,000. Simple to administer and communicate, and ensures all employees have some level of protection.
- Equal benefit for all employees
- Simple to administer
- Common starting point for small employers
- $50,000 is tax-free to employees
Salary Multiple Plans
Benefit equals 1x, 1.5x, or 2x an employee's annual salary. More meaningful for higher-paid employees and better reflects actual income replacement needs.
- More meaningful benefit amount
- Scales with employee income
- Common for professional workforces
- Requires more administrative tracking
Supplemental / Voluntary Life
Employees can purchase additional coverage beyond the employer-paid base — at group rates without medical underwriting up to guaranteed issue limits. A no-cost benefit enhancement for employers.
- Employees buy what they need
- Group rates significantly better than individual
- Guaranteed issue up to set limits
- Evidence of Insurability for higher amounts
AD&D — Accidental Death & Dismemberment
Pays an additional benefit for accidental death or specified dismemberment. Often paired with life at little additional cost, significantly increasing the total protection offered.
- Same or higher benefit for accidental death
- Partial benefits for dismemberment
- Covers loss of limb, sight, hearing, speech
- Often 1:1 with life benefit amount
Dependent Life Coverage
Small life benefits for spouses and children — typically $5,000–$25,000 for spouses and $2,000–$10,000 for children. Helps employees cover funeral expenses and other costs.
- Spouse and child coverage
- Fixed benefit amounts
- Guaranteed issue for all eligible dependents
- Low-cost addition to employee life plan
Business Travel Accident (BTA)
Covers employees for accidental death and dismemberment while traveling on company business. Supplements regular AD&D and is often purchased by employers with significant employee travel.
- Covers work-related travel
- Higher benefit amounts than standard AD&D
- 24-hour vs. on-the-job options
- Blanket coverage for all employees
Common Questions
-
A common starting point is $50,000 flat or 1x annual salary. One times salary is generally the minimum that provides meaningful income replacement for beneficiaries. Many employers offer 1x–2x salary. We'll help you benchmark against your industry and region.
-
Employer-provided group term life coverage up to $50,000 is tax-free to employees. Coverage above $50,000 results in imputed income — the cost of the excess coverage is included in the employee's taxable wages based on IRS Table I rates. This is an important consideration when designing benefit amounts.
-
Guaranteed issue means employees are approved for coverage without answering health questions or taking a medical exam. This is a significant advantage of group life — an employee with a serious health condition who couldn't afford individual coverage can still protect their family through the group plan.
-
Group life coverage typically ends when employment ends. Most plans offer portability (the employee can take coverage with them at group rates) and/or conversion (the ability to convert to an individual policy without a medical exam). Employees should be notified of these options at termination.
-
Life insurance pays a death benefit regardless of cause of death (with standard exclusions). AD&D pays only for accidental death or dismemberment resulting from a covered accident. AD&D pays in addition to life insurance if death results from an accident, effectively doubling the benefit.
Give your employees the protection their families deserve.
Group life and AD&D is one of the most meaningful — and most affordable — benefits you can offer.