If you own a property management business and are planning on hiring additional employees, something you’ll want to think about is what insurance you have available. Many small businesses want to offer their employees some form of health or life insurance, but struggle because group plans can be expensive.
As a result, many small business owners choose to have their employees purchase their own individual plans. However, purchasing individual plans isn’t a cost-efficient option for many people, so they choose to go without insurance. Sometimes, valuable employees may even quit your company to move to a company that does offer insurance.
So what can you do? If you want to keep your employees happy, you need to offer some sort of insurance. Depending on your finances and the number of employees you have, a standard group insurance plan might be nearly impossible. That is why many small businesses turn to the alternative of relevant life insurance.
What is relevant life insurance?
Relevant life insurance is a policy that the company takes out to provide life insurance to specific employees. It is perfect for small businesses that can’t afford a group policy but that still want to provide some sort of benefits to higher-level employees.
With a relevant life insurance policy, the company pays the premiums. If an employee should die, their beneficiaries will receive a lump sum of money. Usually, the amount covered for each employee will be determined by such factors as age, lifestyle, salary, mortgage, and other personal factors. The amount covered can be a level amount or it can be linked to inflation.
Relevant life insurance policies are only available to the employee while they’re working for your business. If they choose to leave, they’ll need to purchase their own policy or get insurance from their new employer.
Why should you use relevant life insurance?
Relevant life insurance benefits both your business and your employees. Many people worry about what will happen to their families if they die. Relevant life insurance ensures some financial security for their family members.
Relevant life insurance is tax-efficient, so there can be huge savings for everyone involved. Even directors and owners can cover themselves through their business instead of their personal income. Employees get insurance without having to pay for premiums. Beneficiaries will a tax-free payment.
Beyond the financial benefits, having relevant life insurance can help you retain employees. Offering insurance helps employees feel as though they’re valued and cared about, so they’re more likely to be productive and stay with the company.
How much does relevant life insurance cost?
The cost of the policies will depend on the provider. Providers will typically look at things such as age, health, and lifestyle. Many providers provide online comparison tools that will allow you to receive a quote. You can find an example of one of these online comparison tools at MyKeyManInsurance.com. If you need help figuring out how to compare different rates and levels of cover, consider working with a professional financial advisor to help inform your decision.
How do you take out a policy?
The first step in taking out a policy is to search around for different providers and find a provider that meets the needs of your company. Each provider will provide you with a quote. You’ll then work directly with the provider to take out the policy. Taking out a policy can take anywhere from a few days to a few months. This all depends on the complexity of the policy and if the provider gets all the needed paperwork. For example, employees may be asked to submit medical records. If an employee delays sending the records, there will be a delay in the policy.
Why are medical records necessary?
Some employees will need to submit medical records, depending on their age, their health, and how much coverage is provided. Individuals that are over the age of fifty or that have had significant health problems will most likely be required to submit medical records. Some policies may also require a medical exam.
The healthier your employees are, the lower your premium will be. To keep your employees healthy, consider staying an employee wellness program that encourages them to eat well and to exercise well.
Final thoughts
If you’re operating a small business and the idea of taking out a group insurance policy makes you cringe, consider a relevant life cover policy instead. It still allows you to provide coverage for your employees, but at a more affordable rate.
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