A life insurer has started offering inflation protection and automatic buy-up options for its voluntary, employee-paid group life plans in the small and midsize employer market.

The inflation option is an automatic benefit increase feature, says the company, Guardian Life Insurance Company of America, New York. The option makes a 5% cost of living adjustment for 5 years after the first year of the employee’s participation in the plan.

Example: $100,000 of base coverage would become a $127,628 death benefit in 5 years, Guardian says.

The buy-up feature allows employees to increase life coverage each year, without undergoing medical exams, if they take the automatic re-enrollment option. The option is available up to the plan’s overall guarantee issue amount.

Example: If the plan’s coverage levels are $25,000, $50,000, $75,000 and $100,000, and if the guarantee issue amount is $75,000, employees would be eligible to buy $25,000 in year 1 (the base amount), $50,000 in year 2 (guaranteed issue), $75,000 in year 3 (guaranteed issue), and $100,000 in year 4 (subject to evidence of insurability and valid for 2 years).

- lk