Group Benefits Coverage is an important part of a company’s overall employee compensation plan. Group benefits coverage can include life insurance, health insurance, and retirement plans. These types of benefits can help employers attract and retain first-rate employees. In most cases, the cost for group coverage is much less than it would be if an employee bought a similar amount through a private individual policy. Liveoak Agency, Inc. can help you set up an inclusive group benefits plan to suit your budget and employee compensation goals.
How Group Benefits Coverage Works
The organization/employer that purchases the group policy is considered the “policy owner.” As the policy owner, the organization/employer keeps the original contract, called “the master contract.” Those eligible to elect coverage through the companies group benefits policy receives a certificate of insurance known as a “certificate of credible coverage.”
A certificate of credible coverage serves as proof of insurance, but it is not the actual life insurance policy. This document lays out the terms of the individual’s policy, such as beneficiaries, and, In the event the policy holder leaves the company – thus terminating the policy – the certificate of credible coverage will need to be provided to any subsequent insurance companies.
Are There Different Types of Group Benefits Coverage?
The most common form of group benefits life insurance is term insurance. Group term life insurance is typically offered in the form of annual renewable term insurance. Customarily the employer will pay most, if not all of the premiums, but this is not always the case. Employers can offer term life insurance in multiple ways: employer-paid, employee-paid (voluntary), or a combination of these (contributory). The amount of coverage is equal to one to two times the employee/s yearly earnings. Organizations/employers have quite a bit of leeway in choosing how and to whom they offer participation in group insurance plans. Employers can choose to offer this benefit to all employees, or only a select class of employees. Employers can also exclude certain employees that don’t meet specific criteria. Many employers require employees to work a minimum number of hours per week to be eligible. Many times an employee must remain employed for an allotted time before they are eligible for benefits.
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