How to Offer Life Insurance to Employees with No Out-of-Pocket Expenses

Life insurance is one of the most valued employee benefits — the Society for Human Resource Management (SHRM) reports that 92% of employees consider benefits important for overall job satisfaction. Yet most small and mid-sized businesses cannot justify the expense of group term life insurance, which typically runs $50 to $200 per employee per month depending on coverage levels and workforce demographics. The Preventive Care Benefits Program solves this problem by including $150,000 in group term life insurance for every enrolled employee — funded entirely through pre-tax payroll restructuring with no out-of-pocket expenses for the employer or the employee.

The Challenge for Small Business Owners

Group term life insurance has traditionally been a benefit reserved for large corporations with dedicated benefits budgets. For a company with 50 employees, even a modest $50,000 group life policy at $30 per employee per month adds up to $18,000 per year in employer premiums — a significant expense that many growing businesses cannot absorb.

The result is a gap in coverage. While 98% of Fortune 500 companies offer employer-paid life insurance, many small businesses with 5 to 250 employees offer nothing. Employees are left to purchase individual life insurance policies on their own — often at higher rates and without the underwriting advantages of group coverage.

How the PCBP Includes $150,000 Life Insurance

The Preventive Care Benefits Program includes group term life insurance as part of its comprehensive benefits package — alongside prescription medications, telemedicine, mental health services, and hospital bill reduction. The key difference from traditional group life: the coverage is not funded by employer premium payments.

Instead, the life insurance benefit is funded through the program's pre-tax payroll restructuring. Each enrolled employee takes a $1,220 monthly pre-tax deduction through a Section 125 cafeteria plan, which generates tax savings for both the employer and the employee. A portion of the employee's tax savings — typically $250 to $350 per month in combined federal, state, and FICA tax reductions — funds the full suite of preventive care benefits, including the life insurance coverage. The employee's net take-home pay stays the same.

What Employees Receive

Every enrolled employee receives the following life insurance benefits:

• $150,000 group term life insurance — a death benefit payable to the employee's designated beneficiary
• $150,000 accidental death and dismemberment (AD&D) coverage — additional protection in the event of accidental death or qualifying injury
• Beneficiary designation: employees choose their own beneficiaries and can update designations at any time
• No medical exam required — coverage is guaranteed issue through the group plan, with no individual underwriting for standard enrollment

Portability and Cash Value

If an employee leaves the company, the life insurance coverage includes a portability option — the employee can convert their group coverage to an individual policy without losing coverage or needing to go through new medical underwriting. This is a significant advantage over traditional group term policies, which typically terminate on the employee's last day of employment.

For qualifying whole life policies within the program, there is an additional benefit: cash accumulation value. After the second year of enrollment, the policy begins to build cash value that the employee can access. The program has historically paid average annual dividends of 6.5%, which contribute to the policy's cash value growth. This transforms the life insurance from a pure risk-protection product into a financial asset that employees carry with them throughout their careers.

Cost Comparison: Traditional vs. PCBP

The financial contrast between traditional group life insurance and the PCBP approach is stark:

Recruitment and Retention Impact

In a competitive labor market, benefits differentiation matters. SHRM's research consistently shows that life insurance ranks among the top five most valued workplace benefits. Offering $150,000 in life insurance coverage — particularly when it requires no out-of-pocket expenses from the employee — positions small businesses to compete with larger employers for talent.

For employees with families, the impact is personal. A $150,000 death benefit provides meaningful financial protection — enough to replace several years of income, cover a mortgage, or fund a child's education. Combined with the AD&D coverage, the total potential benefit of $300,000 delivers genuine financial security that employees and their families recognize and value.

The Preventive Care Benefits Program makes this level of coverage accessible to businesses of any size — from 5 employees to 250 and beyond — without adding a single dollar to the benefits budget. Employers gain FICA savings of $1,119.96 per employee per year while providing a benefit package that rivals those of Fortune 500 companies.