Life Insurance

Employer-sponsored life insurance provides a set payout to an employee’s beneficiaries upon death, often based on a multiple of the employee’s salary, with optional additional coverage. Many plans include accidental death and dismemberment (AD&D) benefits for death by accident or loss of limbs. Employees can also purchase individual policies, but group coverage through employers is typically cheaper and allows broader participation. Three main types of life insurance are term, whole, and universal; term covers a set period and ends without payout unless renewed, whole life covers the insured for life and builds cash value, and universal life combines term coverage with a flexible savings component. Group term life insurance generally covers at least 10 full-time employees and can be contributory (shared cost) or noncontributory (employer-paid), with tax benefits favoring noncontributory plans. Premium costs are determined using a Uniform Premiums table based on age and sex, reflecting mortality rates and updated over time, and underwriting evaluates eligibility and premium amounts. Universal life insurance allows policyholders to adjust the split between insurance and savings, with investment growth tied to market rates and flexible premiums and benefits. AD&D insurance covers accidental death or major injury but not illness-related death and generally costs less due to the lower incidence of fatal accidents. As workplace hazards have declined, AD&D has become less central in employer benefit packages.