Group life insurance premium calculator: what would basic life cost?
Enter covered employees, average salary, the benefit multiple and the rate per $1,000 to estimate the premium. Built for HR and finance teams pricing a group term life benefit.
Estimate a group term life premium.
Use the rate from your quote. The result updates as you type.
For example 1 means one times annual salary.
Take this from your quote. The default is an assumption.
Your estimate
An estimate from the rate you enter. Your carrier quote sets the real premium, which may vary by age, plan and group.
What is group term life insurance?
Group term life pays a death benefit to a beneficiary named by the employee, and it is usually offered to all eligible employees under one policy. Many employers provide a basic benefit, often a flat amount or a multiple of salary, and offer more as a voluntary benefit paid by the employee. Accidental death and dismemberment coverage is often added to the same policy.
How is group life taxed?
Coverage up to $50,000 provided by the employer is not taxed to the employee. For coverage above that amount, the cost is treated as wages, figured with an IRS table by age and reduced by anything the employee pays. It is subject to Social Security and Medicare tax and is reported on the Form W-2. Your payroll team should plan for it.
Common questions
How do carriers price group life?
Most quote a rate per $1,000 of coverage per month. The rate depends on the age mix of the group, the benefit amount and the carrier. Many offer a rate guarantee for a set period.
Does the premium change with salary?
Yes. When the benefit is a multiple of salary, the volume of insurance and the premium rise as pay rises.
Should we offer a basic and a voluntary benefit?
Many employers do. A modest basic benefit paid by the employer, with optional added coverage paid by employees, is a common design.
Who can help us compare quotes?
We can compare carrier quotes and review the benefit amount, rate guarantee and administration with you.
Laws and rules referenced
26 U.S.C. § 79 and 26 C.F.R. § 1.79-3 — Group-term life insurance: the first $50,000 of coverage is excluded and the cost above it is imputed using the uniform premium table in the regulation (https://www.law.cornell.edu/cfr/text/26/1.79-3).
26 U.S.C. §§ 3101 and 3111 — Employee and employer Social Security and Medicare tax rates.
This tool gives estimates for education, not tax or legal advice. Rules change, so confirm your situation with a qualified advisor.
Talk to us about group life and disability
Book a 30-minute call and we will look at your current coverage, your workforce and the options that fit. Visit us at 41000 Woodward Avenue, Suite 350 East, Bloomfield Hills, MI 48304, or call 248.370.8853.
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