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

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