What is Life and AD&D Insurance?

Life and AD&D (Accidental Death and Dismemberment) insurance is a type of insurance that pays out a sum of money upon the insured individual’s loss of life, accidental loss of life, loss of limb, eyesight, hearing, etc. Justworks offers access to group term life insurance through MetLife at five different tiers: 1X employee’s salary, 2X an employee’s salary, $10,000, $25,000, $50,000.

Why offer Life and AD&D Insurance?

The benefit payout is designed to ease the financial hardship of families of the deceased or injured. The benefit can be used to pay for funeral costs, mortgage, higher education, etc. It will also give you a competitive advantage on retaining great talent for your company.

Who is eligible for Life and AD&D Insurance?

If your company chooses to offer Life and AD&D insurance through MetLife, all employees who work over thirty (30) hours per week are eligible for Life and AD&D insurance.

How much does it cost?

The MetLife Life and AD&D insurance is 100% employer paid. Please contact our Customer Success team or your Account Manager for more details.

How can I enroll my company?

Life and AD&D Insurance coverage only begins on the 1st of the month. Please contact your Account Manager or our Customer Success team to start offering the benefit.

How can my employees enroll?

If your company chooses to offer Life and AD&D insurance through MetLife, employees working 30 hours (or more) per week will be automatically enrolled.

How do we pay for Life and AD&D Insurance?

Payments are collected, in full, on the second payroll of the month.

How does offering Life Insurance effect my taxes?

The first $50,000 of group-term life insurance coverage provided under an employer-paid policy is tax free. There are no tax consequences if the total amount of policies does not exceed $50,000. However, when group term life insurance exceeds $50,000 for an employee, the employee needs to report the value of coverage in excess of $50,000. The imputed value of this excess amount is also subject to Social Security and Medicare taxes.

Since Life and AD&D Insurance are 100% employer paid, on your invoice, there will be an additional section called “Employee Deductions.” We will include the cost of the coverage as earnings for your employees and then remove the cost of coverage as an Employee Deduction. There is no impact on your employees and they will not be paid any additional amounts, but this process enables us to properly report the value of coverage in excess of $50,000. If you have any further questions about your invoice, please contact your Account Manager or support@justworks.com.

Read more about group term life insurance on the IRS’ website here.


This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.

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