Employee benefits are a significant recruitment tool for companies. According to data from the Bureau of Labor Statistics, "seventy-one percent of workers in private industry had access to employer-sponsored medical care plans, and 52 percent participated in medical care plans in March 2006..sixty percent of workers had access to retirement benefits, with 51 percent participating in at least one type of retirement plan." ["Employee Benefits in Private Industry, 2006" News Bureau of Labor Statistics, United States Department of Labor August 24, 2006]. A comprehensive benefit package only makes an employer look that much more attractive in an increasingly competitive workforce. This section of the CFP® study guide will focus on the common and sometimes not so common types of employee benefits in current use. Candidates will be expected to demonstrate strong knowledge of the fundamentals as well as their application to the planning process when clients need help in making the best use of benefits available to them. Basic questions test definitions, features and important distinctions. Items sets provide a brief fact pattern asking the candidate to demonstrate a somewhat greater cognitive level of analysis and application. The case studies will furnish a great deal of information, challenging candidates to extract relevant data to solve a wide array of problems.

Group Life Insurance
The employer offer of group life insurance, even with employee contributions, provides employees a cost effective way to provide basic estate building and life coverage for one's family. Underwriting requirements are often simplified and any costs born by the employee are deducted through payroll. While not tested extensively, group life insurance is a topic worthy of a candidate's time as it is a frequently encountered benefit amongst clients, prospective or otherwise which planners need to be able to understand and interpret for them.

Learning Objectives

  • Demonstrate an understanding of the fundamentals of the various types of group life insurance, both term and permanent.
  • Understand the types and extent of coverage afforded dependents under such policies.
  • Be able to discuss the income tax implications of such policies for the employer and employee alike.
  • Demonstrate proficiency in the analysis of a group life package for a prospective, current and former employee including policy provisions and applicability of features to an individual's situation.
  • Be able to discuss the mechanics and applicability of group life plan conversion features.


Group Life Insurance: Eligibility

Related Articles
  1. Financial Advisor

    Life Insurance Plans to Help Your Small Business Retain Employees

    How to use and design cash value life insurance plans as an incentive to help attract and retain key employees.
  2. Insurance

    Split Dollar Life Insurance: How it Works

    Understanding how split dollar life insurance plans are designed and what tax regulations they must follow.
  3. Financial Advisor

    How to Help Clients Navigate Open Enrollment

    With companies trying to pass on more costs to employees, making the right choices during open enrollment is more important than ever.
  4. Retirement

    Why Own Life Insurance in a Qualified Retirement Plan?

    What are the pros and cons of owning cash value life insurance in a qualified retirement plan?
  5. Insurance

    Tips for Helping Clients with Life Insurance Needs

    Life insurance needs will likely change over the client’s lifetime and again financial advisers can provide an objective sounding board.
  6. Financial Advisor

    Is Life Insurance From Your Employer Enough?

    Covering the needs of the ones you would leave behind is not easy. But efforts to secure a life insurance policy outside of work should pay off.
  7. Financial Advisor

    Who Should Buy a Guaranteed Issue Life Insurance Policy?

    Guaranteed issue life insurance policies have added costs and reduced benefits that make them suitable for only a limited pool of buyers.
  8. Insurance

    5 Life Insurance Questions You Should Ask

    Confused about $1 million dollar insurance advertising claims? Decide whether they'll pay off for you.
  9. Retirement

    Is a SIMPLE IRA Right for Your Small Business?

    Here's how small businesses can benefit from offering a SIMPLE IRA to their employees.
  10. Retirement

    Is Your 401(k) Administrator Competent?

    The more that employees know about their employee 401(k) plans, the better. But what doesn't your administrator know?
Frequently Asked Questions
  1. What are the Differences Between Affiliate, Associate and Subsidiary Companies?

    All three of these terms refer to the degree of ownership that a parent company holds in another company. Read on to find ...
  2. What Does it Mean if the Correlation Coefficient is Positive, Negative, or Zero?

    Learn what the correlation coefficient between two variables is and what positive, negative and zero correlation coefficients ...
  3. What's the Difference Between a Market Economy and a Command Economy?

    Set by supply and demand, a market economy operates through a price system; in a command economy, governments control the ...
  4. What Factors Cause Shifts in Aggregate Demand?

    Find out how aggregate demand is calculated in macroeconomic models. See what kinds of factors can cause the aggregate demand ...
Trading Center