In today’s workplace, small business owners might feel like they’re fighting an uphill battle to recruit and retain quality employees. When large companies often have many perks and benefits to offer their workforce, finding ways to keep a good staff can prove difficult.
However, small business owners have many options when it comes to creating an attractive work environment, including maintaining a good work culture, recognizing good performances, and offering voluntary benefits to their employees.
Voluntary Life Insurance
One such benefit an employer can offer to his or her employees is voluntary life insurance. Like its name implies, it is a voluntary, or optional, benefit provided by employers. In exchange for a monthly premium paid for by the employee, it provides a cash benefit to a named beneficiary upon the death of the insured employee. Voluntary life insurance can be voluntary whole life insurance or voluntary term life insurance.
Voluntary life insurance is often less expensive than individual life insurance policies, making it more appealing to employees.
How Many Employees Do I Need?
If you’re a small business owner interested in offering voluntary life insurance to your employees, you may be wondering how many people you need to employ to offer such a benefit.
According to the IRS, you should follow the “10-employee rule,” which states:
“Generally, life insurance isn't group-term life insurance unless you provide it at some time during the calendar year to at least 10 full-time employees.”1
The IRS indicates you should generally count employees who choose not to receive this insurance unless “they must contribute to the cost of benefits other than the group-term life insurance.”
There are exceptions that allow employers to treat insurance as group term life insurance, even if they do not meet the 10-employee rule. To learn more, visit irs.gov.
Creating a Good Workplace
If you’re looking for ways to make your workplace better for your employees, you’re already on the right track. If you would like more information on voluntary life insurance, contact a licensed insurance agent or visit irs.gov.
Categories: Insurance, Group Life