Term Life Insurance Articles
Can Term Life Insurance Help You When Starting A Small Business?
2009-09-01
When starting a small business, it's vital to offer a good set of benefits for your employees. The benefits that you offer can largely determine the quality of the workers that you hire. However, as any small business owner knows, money is especially tight when a company is starting up. In this case, it pays to get creative with benefits. One way to do this is to offer employees term life coverage. Giving them the option of term life insurance is one way to provide a tangible, helpful extra for your work force while also saving money for the business.
You may have noticed that term life coverage is often offered by larger businesses, and it's for good reason. Businesses and individuals who invest in term life insurance don't pay taxes on the first $50,000 of coverage per year. If your business employs a large number of workers, this means that term life insurance can save you a large amount of money in taxes that you'd otherwise never see again if you opted for a taxable benefit instead. Anything above $50,000 of term life coverage is considered a fringe benefit. The excess amount is taxed accordingly, so if you're offering high amounts of coverage, you should speak with your employees and your accountant to figure out what taxes are being paid.
Of course, in order to determine whether to even get a term life insurance quote, you've got to consider the type of employees and income range that you're hiring. Younger, healthy workers may be unconcerned about insurance, especially if they're not married or aren't familiar with the benefits. If they're asked to pay in on a group policy, they might simply refuse. For this reason, it's wise to have a meeting to discuss term life insurance if you elect to consider the benefit. Explain that through the business, they'll get a lower-than-average term life insurance quote. Also point out that the tax benefits for group policies are notable. Use this gathering to gauge your employees' reactions.
Once you've decided to go through with buying a term life insurance for all or some of your employees, be sure to look around to ensure that you're getting the best rates. Getting coverage information and several term life insurance quotes from different companies will help you determine whether it's a cost that you can take on. Offering a good rate on term life insurance is a solid move that can save your small business thousands of dollars a year. And, as long as the paperwork is done properly and employees understand their benefits, this will serve to keep all your workers satisfied with you as their employer.
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When starting a small business, it's vital to offer a good set of benefits for your employees. The benefits that you offer can largely determine the quality of the workers that you hire. However, as any small business owner knows, money is especially tight when a company is starting up. In this case, it pays to get creative with benefits. One way to do this is to offer employees term life coverage. Giving them the option of term life insurance is one way to provide a tangible, helpful extra for your work force while also saving money for the business.
You may have noticed that term life coverage is often offered by larger businesses, and it's for good reason. Businesses and individuals who invest in term life insurance don't pay taxes on the first $50,000 of coverage per year. If your business employs a large number of workers, this means that term life insurance can save you a large amount of money in taxes that you'd otherwise never see again if you opted for a taxable benefit instead. Anything above $50,000 of term life coverage is considered a fringe benefit. The excess amount is taxed accordingly, so if you're offering high amounts of coverage, you should speak with your employees and your accountant to figure out what taxes are being paid.
Of course, in order to determine whether to even get a term life insurance quote, you've got to consider the type of employees and income range that you're hiring. Younger, healthy workers may be unconcerned about insurance, especially if they're not married or aren't familiar with the benefits. If they're asked to pay in on a group policy, they might simply refuse. For this reason, it's wise to have a meeting to discuss term life insurance if you elect to consider the benefit. Explain that through the business, they'll get a lower-than-average term life insurance quote. Also point out that the tax benefits for group policies are notable. Use this gathering to gauge your employees' reactions.
Once you've decided to go through with buying a term life insurance for all or some of your employees, be sure to look around to ensure that you're getting the best rates. Getting coverage information and several term life insurance quotes from different companies will help you determine whether it's a cost that you can take on. Offering a good rate on term life insurance is a solid move that can save your small business thousands of dollars a year. And, as long as the paperwork is done properly and employees understand their benefits, this will serve to keep all your workers satisfied with you as their employer.
