Is employer paid group life taxable to employees?

Employer paid group term life coverage above a certain amount may create imputed income for employees under federal tax rules. We explain how this works and coordinate with your payroll provider so that it is handled correctly.

Can employees keep their coverage if they leave?

Many group life policies include portability or conversion provisions that allow departing employees to continue coverage on an individual basis. The specific terms depend on the carrier and the policy.

Do employees need to answer health questions?

Basic coverage and amounts of voluntary coverage up to a guaranteed issue limit often require no health questions when elected during initial enrollment. Larger amounts may require evidence of insurability.

Group Life Insurance in NJ and North Carolina

Group Life

Coverage at a glance

Group life insurance is term life coverage provided through an employer. Basic group life is often paid by the employer and may be offered as a flat amount or as a multiple of salary, while voluntary or supplemental group life allows employees to purchase additional coverage for themselves and often for a spouse or children through payroll deduction.

Group life is frequently paired with accidental death and dismemberment coverage, and many policies allow employees to continue or convert their coverage if they leave the company. Because enrollment is offered to the group, employees can often obtain a meaningful amount of coverage with simplified underwriting. Features and limits vary by carrier.

Colleagues reviewing documents together around a boardroom table

Who it is designed for

Group life insurance is designed for employers of every size who would like to offer a benefit that employees value highly at a modest cost to the business. It is particularly meaningful for teams with young families and for employers who want to complement a group health plan with broader protection.

How the plan works

We help you decide on the structure of the basic benefit, whether to offer voluntary coverage and how the program should interact with your other benefits. We then compare carriers, coordinate enrollment and explain the coverage to your employees in clear terms so that they understand what they have.

Throughout the year, we support you with additions, changes and claims, and we review the program at renewal so that it remains competitive and continues to meet the needs of your team.

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Common questions

Group Life, answered

Employer paid group term life coverage above a certain amount may create imputed income for employees under federal tax rules. We explain how this works and coordinate with your payroll provider so that it is handled correctly.

Prefer to talk it through? Call (973) 524-7188 and we will answer in person.