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Receiving life insurance as part of your employee benefits


As a benefit, employers may offer employees life insurance. The reason to add this as part of a comprehensive set of benefits would be to entice recruits to work for that company. The employee benefits in that, in the event of his or her death, a lump sum is paid out to nominated beneficiaries.
The average Australian household had debt totalling about $91,018 in the financial year 2016/2017 (http://www.medianet.com.au/releases/145748/). Should the breadwinner pass away, or, after an accident, not be able to work anymore, the family would be left with that debt. However, a life insurance covers such an event financially, which is why receiving it as part of your employee benefits may be a lifesaver for your family.

Benefits of offering employees life insurance

Employees can benefit from life insurance by having that just-in-case cover, particularly for those who are single-income earners with children. In addition, employees may also benefit from tax breaks. In this case, an employer can gain the benefit of tax-free coverage up to $50 000. This is easy for the employee to administer, as it does not need much monitoring.

Downside of offering employees life insurance

In the event of a claim being made, some paperwork will be required, such as filing the claim with a death certificate. However, the employee may not value or use this perk.

Key types of life insurance offered

The three main types of life insurance policies that employees may obtain have their own benefits:
·         The full life insurance covers the family in the event of an emergency, funds able to be withdrawn before death. This sort of life insurance, although being an investment, is not the ideal from of investing, the rate of return being low. This policy remains active as long as the premiums are paid.
·         The variable life insurance places a portion of the monthly payments into investment accounts, such as stock funds, bond funds, or a money-market account managed by the insurance company. This also implies that the investment may fluctuate, although there is normally a minimum guaranteed amount to be paid out to the nominated beneficiaries after death of the policyholder.


·         The universal life insurance cover is similar to variable life insurance in that the funds are invested and paid out; however, the savings grow on a tax-deferred basis. 
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