SavvyprobookkeepMany business owners often face doubts about responsibility and the need to take out life insurance for employees. As an alternative in the search for security, this type of insurance is interesting both for the employee and their family members and for the employer himself.
But what is the legal requirement? What are the rules that revolve around it? How to hire by conducting the process properly? Why is it important for the company? In today’s article, you will discover the answer to these and other relevant questions on the topic.
At the end of reading, it is possible to have a complete overview with all the tips and information on the subject! Follow and stay up to date!
What is life insurance for employees?
This is a type of group life insurance, intended for businesspeople and corporate employees. The objective of this type of insurance is to offer protection for the company’s human capital and its family members.
In addition to acting as protection for the worker, it also presents itself as a factor that adds value to the company. It is common to notice that companies that offer benefits such as life insurance tend to have more candidates interested in joining the team.
What are the employer’s legal obligations?
Life insurance is optional for many organizations. However, some of them are forced to purchase this type of product. In general, Collective Labor Agreements are the documents that determine whether or not it is mandatory to provide life insurance to workers.
In addition to insurance, the conventions also address issues related to other modalities, including personal accidents and health, pension, dental plans , etc. Among the market segments that are linked to the requirement for life insurance, we can highlight:
- civil construction sector;
- retail food trade;
- accommodation and hotel services;
- condominium;
- accounting;
- motorcycle couriers and motorcycle freight;
- Bars and restaurants.
It is worth highlighting that Collective Agreements are different in each state and, therefore, entrepreneurs need to analyze which are mandatory in their region of operation.
However, as we have already mentioned, several companies that are not obliged to offer life insurance choose to rely on this benefit as a loyalty and employee motivation strategy.
Therefore, even if your company does not need to make the plan available according to legal requirements, it is interesting to seek information on the market and evaluate how the service can bring direct or indirect benefits to the productivity and security of your business.
How to make the best hire?
Life insurance can be taken out in different plans and modalities . Typically, what changes is the size and scope of each one. Therefore, when deciding on the plan, it is essential that the entrepreneur looks for data on the market and has knowledge about how it works.
Due to the fact that the contract is signed between the company and the insurance company, the employee has no influence or control over the contract. Therefore, the manager is able to freely negotiate the rules and contracted coverage.
Corporations often offer so-called group life insurance, which may or may not be combined with group personal accident insurance. Furthermore, the benefit can be extended to the employee’s children and spouse. This definition, however, is at the discretion of the contractor.
Why is this type of insurance important?
Life insurance, as one of the features made available by the company, is an efficient way of ensuring peace of mind for employees in problematic situations.
This includes not only death, but also emergency assistance during work trips, advance payments in case of chronic illnesses and temporary coverage in the event of incapacity.
It also represents a considerable advantage for attracting and retaining new talent at a low cost to the organization. In other words, it can be implemented in the company without the need for large financial investments, bringing significant benefits to the enterprise.
As if the benefits in terms of productivity and appreciation of human capital were not enough, life insurance in companies that adopt the Real Profit tax regime can serve as a means of deducting Income Tax. This possibility appears as another relevant aspect, which many companies are not even aware of.
How does the employee benefit?
Safety is undoubtedly one of the most important factors for employees. In this sense, the employee feels safer knowing that the family will have support if something unforeseen happens.
Furthermore, in cases where the coverage also includes cases of disability and absence from work, the worker guarantees extra security. All of the benefits mentioned reflect positively on the team’s productivity, also helping the company to retain talent.
Thus, with a focus on safety, the corporation contributes to the well-being of its employees, providing a type of benefits that make a difference in their lives and those of their families.
How to use insurance as a motivation mechanism?
Life insurance is on the list of actions that can be adopted by the company to promote and value its employees. Showing concern for employees and their respective family ties is a gesture of humanity, above all.
As we mentioned above, this is undoubtedly a highlight for attracting good professionals within the market. They tend to feel supported by companies that think and act with due attention to the well-being of human capital.
This appreciation is quite positive from many points of view. From helping to increase engagement to generating reflexes that represent productivity gains, including, of course, the company’s results, everyone benefits.
As we noted, life insurance is so interesting that even companies that are not required to take out it see its advantages.
Therefore, several corporations have adopted it as a talent retention mechanism, tax deduction and team motivation strategy.
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