Life Insurance Benefit

[faithnlve]

What is the name of your state (only U.S. law)? VT..heres a question. If the company as part of your benefit package gave each employee a 50,000.00 life insurance policy while working, what happens to that benefit cash value if the company decides to get rid of it for all employees. Can the employee continue to pay to keep it? Or can the company cancel each policy and take all the cash value that has built up in each policy. ty Faith

 

[ShyCat]

I seriously doubt an employer-provided life insurance is anything other than a term life insurance policy. Term life insurance does not accrue a cash value. As the owner of the policy, the employer is allowed to cancel it (i.e., your permission as the insured is not required). The group policy may or may not be convertible to individual, depending on the contract with the insurance company; you'll have to ask your HR department about that.

 

[cbg]

After 30 years of administering employer sponsored group benefits, I have yet to see a life insurance plan offered by an employer to all employees, that would be anything but term insurance, and term insurance does not have a cash value.

For tax reasons, it would be foolish of an employer to offer a life insurance benefit that would accrue over and above the face value. Only in "key-man" insurance, and not always then, would there be any question of a whole life policy.

Some states require that a group life insurance policy be convertable at term; others do not. Your employer will be able to tell you if yours is or not.