My employer automatically and for free gives me life insurance. Why? I've never been able to understand why they do that...

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Larry McClanahan, Financial Advisor

@LarryMcClanahan • 09/12/15 This answer was first published on 09/12/15. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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Employers offer benefit packages that they believe will be attractive to most of their employees...creating incentive to work for (or stay with) the employer. Presumably, your employer believes that a basic amount of group term life insurance fits that bill.
Group term life insurance is generally an inexpensive benefit to provide. In the unfortunate event an employee dies prematurely, it can provide an outsized payout for the employee's beneficiaries vs. what the insurance actually costs the employer. Also, the first $50,000 of group term life insurance is not considered a taxable benefit under IRS rules.

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