What should I consider when picking group insurance plan?


Striking a balance between managing costs and providing adequate coverage is essential. PHOTO | SHUTTERSTOCK 

In today’s highly competitive job market, perks and benefits for workers are crucial for both attracting and retaining the best employees.

One of these perks, which also doubles as a cornerstone of financial security for workers and their families, is group life insurance.

Below are some important points that employers should remember when picking a plan that meets the diverse needs of their staff.

Coverage options and amounts

Key factors include the range of coverage options as well as the amount of coverage offered. Striking a balance between managing costs and providing adequate coverage is essential.

Analyse your employee demographics and their financial responsibilities to determine the appropriate coverage amount.

Moreover, offering a variety of coverage options not only allows employees to tailor their coverage to their individual needs but also ensures inclusivity is observed.


Employers also ought to perform due diligence and assess the plan’s cost-effectiveness. Premiums should align with the benefits offered, ensuring that employees receive substantial coverage without placing an undue burden on the company's finances.

Careful financial analysis will help strike the right balance between cost and coverage, making the plan appealing to both employees and the organisation.

Eligibility criteria

Define clear and inclusive eligibility criteria. Employers should strive to not only consider encompassing full-time and part-time employees but remote workers as well, to achieve a comprehensive coverage scenario. Inclusivity further ensures that each employee enjoys access to the benefits, promoting a sense of belonging and equality within the organisation.

Beneficiary declaration and flexibility

Plans should offer flexibility in the beneficiary declaration. Employees' life circumstances may change over time due to marriage, divorce, or other factors.

Allowing employees to easily update their beneficiary designations ensures that the proceeds are directed to the intended recipients, aligning with their current relationships and responsibilities.

Additional benefits and riders

Consider whether the group life insurance plan includes additional benefits or optional riders. These may include coverage for critical illnesses, accidental death and dismemberment, disability, and more.

Offering these riders enhances the value of the plan and addresses the diverse needs of your workforce, promoting employee satisfaction and well-being.

Waiting and enrolment periods

Establishing waiting periods and enrolment periods is crucial for effective plan management. Evaluate the waiting period for new employees before they become eligible for coverage, balancing the need for timely coverage with practical considerations.

Regular enrolment periods provide opportunities for both new and existing employees to join the plan or make changes to their coverage based on life events.

Carrier reputation and stability

Choosing a reputable and financially stable insurance carrier is paramount. A carrier's reputation and financial standing directly impacts claim processing, customer service, and the overall experience for both employers and employees.

Research carriers thoroughly to ensure they have a track record of reliability and ethical business practices.

Employee education and support

A group life insurance plan's effectiveness is closely tied to employee understanding and engagement. Opt for a plan that offers comprehensive educational resources and ongoing support to help employees make informed decisions about their coverage.

Clear communication channels for plan details, benefits, and claims procedures contribute to a positive employee experience.

Renewal and flexibility

Consider the plan's renewal process and its flexibility to adapt to changing workforce needs. As your organization evolves, the insurance plan should be able to accommodate changes in employee demographics, benefits preferences, and financial considerations.

Legal and regulatory compliance

Lastly, ensure that the chosen insurance plan complies with all relevant regulatory and legal requirements. Familiarising with state-specific insurance laws and regulations pertaining to group insurance plans such as the Employee Retirement Income Security Act is also advisable.

Selecting an effective group life insurance plan requires a thoughtful and thorough evaluation of various factors.

A well-chosen group life insurance plan not only supports employees and their families during challenging times but also contributes to a positive company culture centred on employee well-being.

The writers can be reached via [email protected] and [email protected]

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