November 30, 1999 (The Editor’s Desk is updated each business day.)

Features of life insurance plans

About three-quarters of employees with basic life insurance in medium and large private establishments have double indemnity coverage.

[Chart data—TXT]

With double indemnity, a life insurance plan provides additional benefits in the event of accidental death or dismemberment. The double indemnity benefit provides an additional amount often equal to the basic life insurance benefit in the case of accidental death. A portion of the life benefit is paid in the case of dismemberment.

Another common feature of employer-provided life insurance plans is the availability of supplemental coverage. In 1997, 62 percent of employees with life insurance could elect to increase the basic life plan’s benefit amount; supplemental plans may be partially or fully employee financed.

Also, life insurance plans are usually based on a multiple of earnings formula or a flat dollar formula. The "multiple formula" benefit is more prevalent—58 percent of employees with life insurance were in plans that link the benefit amount to employees’ earnings, while 41 percent were in plans that provide a fixed benefit amount.

These data are from the BLS Employee Benefits Survey. Figures in this article are for full-time employees in medium and large private establishments. Learn more about life insurance in Employee Benefits in Medium and Large Establishments, 1997, BLS Bulletin 2517 (PDF 804 K).