Checklist on offering life insurance to employees

Here is a checklist of factors an employer needs to consider when offering life insurance to employees:

• What insurance product will be offered? Group-term life insurance? Split-dollar or reverse split-dollar?

• Will any permanent insurance be available? Or only term life insurance?

• Who will be covered under the life insurance? Employees only? Retired employees? Spouses and/or dependents? (Only employees can be covered by group-term life insurance.)

• How are employees who become disabled to be handled?

• When is life insurance coverage effective? Is there a waiting period? If there is a waiting period, how long is it?

• What amounts of insurance will be available?

• How is the amount of insurance to be determined? A set dollar amount? A percentage of salary, such as 1, 2, or 3 times annual salary?

• Who will pay the life insurance premiums? Employees only? Employer only? Both employer and employee?

• Do employees need to buy a minimum amount of insurance?

• Is there a maximum face amount of insurance?

• How are costs of coverage determined? What information does the employer need to provide to the insurer to estimate rates?

• Can insurance coverage be terminated?