Life Insurance

What Life Insurance Covers

Group term life insurance pays a death benefit to the designated beneficiary if a covered employee dies while the policy is in force. The benefit is typically expressed as a flat dollar amount, such as 50,000 dollars, or as a multiple of annual salary, commonly one to two times base earnings, subject to a benefit maximum. Accidental death and dismemberment (AD&D) coverage provides an additional benefit if death results from a covered accident and pays scheduled amounts for the loss of limbs, sight, hearing, or speech.

Voluntary supplemental life insurance allows employees to purchase additional coverage for themselves, their spouses, and their dependent children at group rates through payroll deduction. Guaranteed issue amounts, which require no medical underwriting, typically range from one to three times salary for employees and 10,000 to 50,000 dollars for spouses. Coverage above guaranteed issue amounts is available subject to evidence of insurability. Some employers also carry key person life insurance policies on critical executives or revenue-generating employees, with the company named as beneficiary to offset the financial impact of losing an irreplaceable team member.

Who Needs Life Insurance

Every employee with financial dependents benefits from life insurance coverage. Employees with mortgages, young children, student loan debt, or a spouse who depends on their income face significant financial risk in the event of an untimely death. Group life insurance addresses this risk at a fraction of the cost of individual policies, and employer-paid basic life coverage provides a baseline of protection at no cost to the employee.

From the employer's perspective, offering group life insurance is standard practice across virtually all industries and company sizes. Life insurance is frequently bundled with disability coverage from the same carrier, creating administrative efficiencies and volume discounts. Business owners and executives may also need buy-sell agreement funding, key person coverage, or executive bonus life plans (Section 162 plans) to protect the business and provide a competitive executive compensation element. ALKEME tailors life insurance programs to address both broad employee needs and targeted business protection strategies.

Why Life Insurance Matters

The financial impact of an employee's death extends far beyond the workplace. Industry surveys consistently find that many households would face financial hardship within months of losing a primary wage earner, and that a large share of workers are underinsured. Employer-sponsored group life insurance helps close this protection gap by providing coverage that employees might not otherwise obtain due to cost, health conditions, or simple inertia.

For employers, group life insurance is an inexpensive benefit with high perceived value. The cost of employer-paid basic group term life is typically less than 25 cents per 1,000 dollars of coverage per month, and premiums are fully deductible as a business expense. The first 50,000 dollars of employer-provided group term life insurance is excluded from the employee's taxable income under IRC Section 79, making it a tax-efficient benefit for both parties. ALKEME structures life insurance programs to maximize this tax advantage while providing employees the option to supplement coverage through voluntary and dependent life offerings.

Key Features of ALKEME's Life Insurance Consulting

• ●Program design including basic employer-paid life, supplemental voluntary life, spouse life, dependent child life, and AD&D coverage
• ●Guaranteed issue analysis to maximize the amount of coverage employees can obtain without medical underwriting
• ●Portability and conversion provisions that allow employees to maintain coverage after leaving employment
• ●Beneficiary designation support and employee education on coverage adequacy and needs analysis
• ●Key person life insurance and buy-sell agreement funding strategies for business owners
• ●IRC Section 79 imputed income analysis for employer-paid coverage exceeding 50,000 dollars
• ●Multi-carrier marketing to secure competitive rates and favorable underwriting terms
• ●Accelerated death benefit and living benefit riders for terminal or chronic illness