Group benefits often cover up to $50,000 of life insurance without paying premium and is not taxed to the employee as a benefit. However, employees may have the need for more than jus $50k of life insurance. In these cases, the employer, makes available supplemental life insurance, which supplements or adds to the base benefit the employer extends to each employee. The supplemental life insurance can be purchased typically through payroll deduction and is usually purchased in increments of $5,000 or $10,000.
There are many forms of supplemental life insurance. The previous answer touches on the most common form - policies that allow employees to buy up from the group master contract. Sometimes the policies are convertible to an individual policy if the employee separates from the employer, sometimes not.
There are other forms that do not require an employer contribution. If enough employees choose to participate those with pre-existing conditions can purchase a policy through payroll deduction without the need to answer medical questions, or take a medical exam. These supplemental policies are almost always portable.
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There are other forms that do not require an employer contribution. If enough employees choose to participate those with pre-existing conditions can purchase a policy through payroll deduction without the need to answer medical questions, or take a medical exam. These supplemental policies are almost always portable.