As a compassionate owner, you strive to keep your workers happy, safe, and financially secure. You and your fellow executives have been toying with the idea of introducing a business life insurance package. But you are not sure how to begin, and you want to guarantee that any program you initiate pays you back in terms of better employee satisfaction and more complete coverage. This article can introduce you to some key concepts – and expose some common traps – so you can maximize your investment dollar.
Business Life Insurance: Why Get It?
Getting life coverage through your company can be cheaper. You face fewer administrative expenses and gain tax advantages. Adding a business life insurance option incentivizes employees and appeals to prospective workers who may be weighing your benefits package against a competitor's. Most plans do not require employees to take medical exams to quality. And you may get a discount if you buy life and health from the same carrier. Talk to an agent about how to get this multi-policy discount. The fewer insurance companies you have to deal with, the easier it will be logistically if/when you or your employees make claims.
Complications to Consider
The biggest complication is that adding insurance means that you add another expense to your ledger. The rules governing limits, exclusions, and timeframes can also be confusing – you may need to spend some time with your agent going over the coverage. In addition, business life insurance is not a panacea. You will still need other coverage – most critically, liability and property insurance. Your rates can increase following an accident, such as an on-plant disaster or auto crash that results in the death of one of your employees. And business life insurance coverage may be prohibitively expensive for people in some lines of work – such as mining or industries centered around toxic chemicals or explosives.
Principles for Optimizing Coverage and Minimizing Costs
Foremost, focus on safety and training for your employees (and for yourself). Comply with laws and with industry norms – go above and beyond these minimum standards if possible. Make decisions grounded in statistics. Look to leaders in your industry as well as to creditable insurance agents for tips. And review your coverage on a regular basis — annually, if not sooner. Definitely take a look at all of your business insurance protection after major events, such as a merger or an onsite accident.
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