How Small Group Life Insurance Can Work for Small Businesses

Planning a comprehensive benefits package for your team is no easy feat, especially if you have less resources than an established enterprise. But even when you’re small or starting out, you should consider offering your employees a competitive perks and benefits package.

One such benefit includes life insurance. While some companies offer 401(k)s and dental, life insurance is becoming increasingly important to employees with families or other loved ones they want to protect against the unexpected.

So, why is small group life insurance important for your small business? And how can you go about getting it? Read on for some pro tips.

Why It Matters For Your Small Business

Have a Competitive Advantage

Even if you’re a small business, deciding not to offer competitive perks and benefits may harm your chances at winning the best talent. Four in five employees want more benefits or perks than they do a pay raise, according to a study conducted by Glassdoor. With that in mind, offerings like life insurance, gym memberships, and unlimited vacation may keep quality employees around longer than competitive salaries alone.

Give Your Employees Peace of Mind

If something catastrophic were ever to happen, life insurance offers a safety net for surviving loved ones. If you have employees with families to care for, life insurance may be another incentive that keeps them on board.

The Benefits to Your Employees

Care for Loved Ones

Above all, the biggest asset of life insurance is that it provides a safety net for loved ones after a family member has passed away. And as Russ Alan Price put it in Forbes, “There’s only one certain reason to purchase life insurance... when you care deeply for someone or want to make a difference in the world, and your financial resources aren’t able to fill the financial gap if you were to die.”

By offering life insurance to your employees, you’ll also be offering the ability for them to do well by others.

Buy Time

If your employee is the primary wage earner in their family, their loved ones may have to make fast and dramatic decisions in the case of their unexpected departure. A life insurance payoff may allow them to cover housing payments, pay off debts, or fund other needed ongoing expenses for children.

Have Cash Readily Available

If an employee passes away, in addition to employer resource support, life insurance delivers money to their loved ones almost immediately. That money also isn’t subject to federal income taxes — which means that recipients will get the full sum without tax impediments. This may give an employee peace of mind to know that their family will still be cared for financially in their absence.

Life insurance isn’t just for big businesses, and it’s not just for older employees, either. It’s another puzzle piece in a comprehensive benefits package that can draw talent, and have them wanting to stay.

Although companies with 100 or more employees usually have pricing advantages over small businesses, it’s possible to find alternative solutions. For example, Professional Employer Organizations (or PEOs) bundle small companies together so that they can receive the same level of benefits as large organizations enjoy. If you’re looking to win the talent war, researching PEOs are a great start.