Supplemental Life Insurance is additional life insurance coverage that is made available to the employees of a company in addition to any base amount of life insurance provided by the employer. Employees often receive a base amount of life insurance coverage from their employer as a fringe benefit. The coverage face amount (the death benefit amount) can be either a fixed dollar amount (i.e. – $50,000) or a ‘multiple of employee salary’ amount. (i.e. – An employee earning $75,000 whose employer provides all employees with 2X salary life insurance, receives life insurance coverage of $150,000.) Most employer provided life insurance is issued on a ‘guarantee issue’ basis. This means that medical conditions are not a determining factor for issuance of said life insurance coverage. Often times, an employee desires to obtain additional life insurance for self and also for spouse and dependents. Such coverage is called Supplemental Life Insurance. Employees may seek to obtain such supplemental life insurance coverage through their own efforts. Often an employer facilitates and aids in the process whereby employees may obtain supplemental life insurance. This may include offering employees access to:
- Guarantee Issue death benefit policy amounts;
- Simplified underwriting (may include waiver of physical exam); and
- Waiver of ‘Age Limit’ face amount (i.e. -death benefit) reductions.