As an employer, life insurance is one of the most economical benefits you can offer--and it is a benefit many employees find attractive. Most insurance companies will underwrite your company as a "group," meaning that since the risk of death is spread across the many individuals who work for your business, the cost per person goes down. This makes life insurance fairly inexpensive for you to offer to your employees. Group life insurance plans make lump-sum payments to specified beneficiaries upon the death of the insured.

On the employee side, many people depend on the life insurance they get from their employers, rather than buying their own policy. Employees also don't have to answer health questions or undergo a physical examination to qualify for employer-sponsored life insurance, which makes these types of polices an attractive part of your benefits package.

Like other employee benefits, it's important to balance how much life insurance you can afford buy against what you need to offer in order to create a competitive benefits package. Benefits packages offered by employers might have a face value of one times salary to a maximum of $50,000, or they could be valued at one to five years of an employee's salary, or more.

Factors to Consider About Life Insurance:

• You could choose to pay for the group policy in its entirety, or you might decide to ask employees to contribute a portion of the costs.
• Premium amounts are not locked in. Your insurance company will review your policy periodically.
• You can create a base policy, then offer employees the option to purchase additional or different insurance over and above of the basic plan, while still taking advantage of the advantageous group rates.