Life Insurance
The definition of Life Insurance, and how it fits into the Zenefits Health Insurance Marketplace
What is Life Insurance?
Both Life Insurance and Accidental Death and Dismemberment (AD&D) coverage protects companies and their employees in the event that something unexpected occurs.
How does Life Insurance work?
In exchange for a monthly premium, members receive a lump sum death benefit payment which is submitted to the beneficiary after the primary coverage holder passes.
Life insurance plans come in three common forms:
- Term life: Provides financial protection for a given period of time. Ie 10, 20 years
- Universal life: provides financial protection throughout the carriers life, and has flexibility on premiums. This usually has higher premium rates than term life coverage.
- Whole life: a type of permanent life insurance designed to provide lifetime coverage. Usually has higher premium payments than term life, and unlike the other this has a cash value, which functions as a savings component and may accumulate tax-deferred over time.