You also will need to decide which of your employees will receive life insurance benefits. Offering group term life insurance benefits to all your full-time employees will most likely allow you to get the best rates, because your group size will be larger.

However, you may decide you only wish to offer life insurance as a benefit to certain employers, such as managers or people who have been with the company a certain number of years. Remember, you won't be able to use your life insurance premiums as a Federal tax deduction if you only offer the benefit to a portion of your employees, unless you meet the following nondiscrimination requirements:

• The plan benefits at least 70 percent of your total employees.
• At least 85 percent of the employees who participate in the plan are not key employees.
• You have set up a class of employees that receive the benefit, and that is found by the IRS to be nondiscriminatory in favor of key employees.

Tip: When considering Group Term Life Insurance, contact professional associations, your local Chamber of Commerce, and other organizations to find out if there is a group you can join in order to get a better group rate for your business.

Remember: The cost of premiums for the first $50,000 of Group Term Life insurance is tax exempt. According to the IRS, any premiums you pay for more than $50,000 in coverage for one employee will count as taxable income for that employee. You will pay payroll taxes on it, and your employee will pay income tax on it.