Everyone understands Life Insurance. No one wants to ever have to use it, but we all understand it.
It’s simple. If an Employee dies while still in Employment, the policy will pay the Beneficiary.
Typically most policies will provide a Benefit Amount equal to a portion of the Employee’s Salary. This allows the Benefits to increase for the more highly compensated Employees. One times the Annual Salary and Two Times the Annual Salary are common Benefit Amounts.
The IRS requires Employees to consider any amount over $50,000 to be reported as Taxable Income, and the value of the premium included on the year end W-2. For this reason, may Employers cap the Benefit at $50,000.
It literally costs pennies a day, and you know you would feel a lot better if you were able to deliver the widow a check to help with their loss.