Salary FYI

Life Insurance

Benefits

Insurance that pays a lump-sum death benefit to designated beneficiaries upon the death of the insured, commonly offered by employers as a basic group benefit.

## Life Insurance

Employer-provided life insurance is a common benefit that provides financial protection to an employee's dependents in the event of death.

### Common Employer Coverage

- **Basic group life**: 1–2× annual salary, employer-paid.
- **Supplemental**: Additional coverage (up to 5–8× salary) at employee cost.
- **AD&D (Accidental Death & Dismemberment)**: Additional benefit for accidental death.

### Tax Treatment (US)

Employer-paid premiums on group life insurance up to $50,000 in coverage are a tax-free benefit. Coverage above $50,000 generates taxable imputed income based on IRS Table I rates.

### Portability

Group life insurance is typically not portable — it ends when employment ends. Some plans offer conversion to individual policies within 30 days of termination, usually at higher rates. This is why financial advisors recommend owning individual term life insurance independently of employment.