A typical policy for a small business will be a group term life insurance policy. Most small businesses can afford only the basics since the smaller you are, the more expensive your premiums will be.

Most policies set a minimum benefit at $10,000 per year. But a very common offering is a year's salary as the benefit. Businesses also often offer employees the option to increase their benefit by two, three, or four times their salary. Employees can "buy up" to get this extra coverage by taking on the additional benefit, as well as the additional cost.

You don't always have a choice, however, when it comes to offering coverage to employees who leave the company. Some states require employers to offer the option of continuing the life insurance policy, in which case the employee will pay premiums directly to the insurance company.