Ancillary benefits help employers create more well-rounded benefits packages for their employees. These benefits cover health and medical expenses that aren’t typically covered by traditional health insurance policies.
Life insurance, in particular, is a common type of ancillary benefit that can help employees continue to provide for their families after they pass. This coverage offers invaluable financial security to employees and their families, making it an important consideration for employers looking to supplement their group health insurance plans.
Here’s what you need to know about ancillary benefits and life insurance.
Contact KSA Insurance today to learn more about ancillary insurance and get a custom quote.
What is Ancillary Insurance?
Ancillary insurance is a secondary type of health insurance that covers expenses not typically covered by a standard group health insurance policy.
This often includes expenses that employees may incur during a hospital stay, such as medical supplies, ambulance rides, medicine, or blood. These types of expenses are often not considered when evaluating the total cost of healthcare and would otherwise have to be paid out-of-pocket by employees.
Depending on the specific benefits employers choose, ancillary insurance can also cover dental care, vision care, disability insurance, hearing aids, and more. Employers may consult with their employees to determine which benefits they would find useful in order to create a comprehensive benefits package that suits their needs.
Voluntary vs. Employer-Contributory Ancillary Insurance
Ancillary insurance can be either voluntary or employer-contributory. The difference between these two funding methods comes down to who is paying for the majority of the premiums.
With voluntary ancillary insurance, employees pay 51% to 100% of the benefit premiums, and the employer pays 0% to 49%. This means that the financial burden falls mostly on the insured.
For employer-contributory ancillary benefits, on the other hand, employers pay 50% to 100% of the monthly premiums, while the employees pay for the remaining costs. Employers may choose employer-contributory benefits in order to lighten the financial responsibility of their employees and encourage them to take advantage of these benefits.
Is Life Insurance an Ancillary Benefit?
Life insurance is one of many common types of ancillary benefits and is one of the most valued employee benefits.
If an employee passes away, life insurance pays out a death benefit to the insured’s family so they can continue to financially support themselves. Death benefits can be used to cover normal living expenses, funeral costs, education expenses, pay off debt, and more.
By supplementing their group health insurance plans with life insurance, employers can provide more comprehensive coverage to their workforce and retain their top employees.
How Does Life Insurance Work?
Like other ancillary benefits, life insurance can be voluntary or employer-contributory. With voluntary life insurance, employees can choose whether they want to opt into the life insurance policy.
There are two main types of group life insurance: term life insurance and universal life insurance.
With term life insurance, employees are covered for a fixed period of time. This term typically lasts for as long as the employee remains employed.
Universal life insurance, which includes group universal life insurance and group variable universal life insurance, offers guaranteed coverage and cash accumulation, which allows insured parties to build cash value that earns tax-deferred interest throughout the life of their policy. Employees can access these funds at any point before age 59.5 without incurring any penalties.
How Much Does Group Life Insurance Cost?
If you’re interested in providing group life insurance to your employees, it’s important to compare several plans to find one that suits your coverage and financial needs.
The cost of group life insurance can vary depending on several key factors, including:
- Number of employees
- Policy cease age
- Age of employees
- Group size
- Level of coverage
At KSA Insurance, our experienced insurance agents work with business owners to help them find affordable, comprehensive insurance policies that provide exceptional coverage to their employees.
Request a Quote
Ancillary benefits offer a great way for employers to bolster their benefits packages, helping them attract and retain employees, boost workplace morale, and improve productivity. Life insurance is a key ancillary benefit that provides invaluable peace of mind and financial security to your employees and their families.
At KSA Insurance, we work with employers in South Carolina and across the southeastern United States to help them choose life insurance policies and other ancillary benefits that provide wide-reaching coverage to their employees.
Contact us today to get a quote and learn more about ancillary benefits for employers.