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September 1990, Vol. 113, No. 9

Life insurance benefits for retired workers

Margaret Simons and Cynthia Thompson

The continuation of life insurance protection beyond active employment is one of many concerns of employees approaching retirement age. For slightly more than half of all full-time employees in medium and large private establishments who have employer-provided life insurance protection while working, such coverage ceases at retirement. Many employers, however, do elect to continue at least a portion of life insurance for retirees, providing some income protection for survivors. This article examines the availability and details of life insurance benefits provided to retired workers.

Forty-two percent of all full-time workers who were provided life insurance as active employees had coverage available to them after retirement if they met plan requirements, according to the Bureau's 1989 Employee Benefits Survey of medium and large private establishments.Virtually all workers with retiree coverage had some reduction in the amount of insurance they would receive after retirement, however. The life insurance benefit was usually reduced either once (to a flat dollar amount or a percent of preretirement life insurance), or gradually over a specific time period. Generally, the reduction began immediately upon retirement.

For all but a few employees with retiree life insurance coverage, the benefit was continued for life. The remaining fraction of workers had coverage continued until attainment of a specified age or for a given number of months after retirement.

This excerpt is from an article published in the September 1990 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.

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Related BLS programs
Employee Benefits Survey
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