Group life insurance doesn't require medical exams, so the health of your employees will not factor into the cost. But generally, your employees' ages, sex, and salaries will. These variables are used to calculate a risk factor for each employee. Risk factors are then averaged to determine the premium.

Another aspect of the risk factor is business type. For example, an accounting firm, where employees sit at desks all day, will have a much lower risk factor (and premium) than a construction business.

The premium is factored on a per $1,000 of the benefit of the employee. You'll pay a price for every $1,000 of the total benefit that's paid out if the employee dies. The price per $1,000 is almost always less than a dollar and usually in the area of 10 cents to 25 cents.

Here's an example: Everything has been averaged in your business - the ages and sexes of your employees and your business type has been rated. The premium is set at 20 cents for every $1,000 of a benefit. If your benefit is one year's salary, employees who are making $50,000 will have a monthly premium of $10.

Most likely you'll get a monthly bill from your insurance agency with one lump sum made up of each employee's premium.