Businesses could consider offering life insurance to employees, and finding the right option might be easier said than done. Human resource professionals could have access to basic resources to help them manage the task, but these tools may prove insufficient. Use employee benefit services to learn about the purpose and value life insurance plans offer to an organization.
A vast array of options are available, so making the best choice that fits a company's budget could be a priority. Many businesses select corporate-owned life insurance (COLI) because it is an affordable, easy-to-manage option.
Companies can purchase COLI to provide protection for a group of employees. These businesses own the cash value of the policies and are the beneficiaries of the life insurance. While organizations are required to notify workers that they are investing in life insurance on them, workers receive no direct advantages from these plans. Instead, organizations may deliver separate insurance coverage to support employees' dental, medical and vision needs.
There are several benefits to investing in COLI. This coverage offers death benefits that could be used to help a company recover plan costs over an extended period, which may prove valuable if an organization suddenly loses a highly compensated worker. With COLI, companies that purchase the insurance can receive financial assistance to continue to manage daily operations while they recover from the loss of a worker.
Additionally, businesses can earn a competitive after-tax yield when compared to other investment options. Many organizations view this coverage as an opportunity to receive tax-free dollars if they suffer the loss of an employee – exactly when money is needed.
Companies can learn more about the investment with guidance from employee benefit consulting professionals. Human resource departments can contact these experts to gain a better understanding about the cost and value of investing in COLI for their organizations.
