Life insurance is among the most common employer-provided benefits and there are a few options that employers have: Employers may either:

1. structure their life insurance plans to pay 100% of the cost of the life insurance (a non-contributory arrangement)

2. require employees to share all or a part of the cost of life insurance ( a contributory arrangement).

The amount of employer-provided life insurance under a typical plan is either:

1. a flat dollar amount, such as a $10,000 death benefit

2. based on a multiple of annual pay over a specified period, e.g., two times annual base pay during the trailing 12 months preceding death).

Types of life insurance policies

Life insurance products vary in purpose and complexity. The following descriptions provide basic information regarding some of the policy provisions typically associated with certain types of policies.

Term life

The simplest form of life insurance is term insurance that provides insurance protection in the event of death (a death benefit) if the death occurs during a specified period of time (referred to as the “term” of the policy). Term life insurance...

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