Get a life - group life insurance. That was my flippant response to someone who recently asked me what valuable benefit they could offer to their staff that wouldn't break the bank.

Like regular life insurance, group life insurance lets an employee designate a person to receive a certain amount of money upon the death of that employee. The best aspect of group life insurance is that coverage is guaranteed, which means that no medical examination is required to qualify for coverage. This can be a real plus for anyone who has suffered a major illness like cancer and finds it difficult to get life insurance. In addition, unlike most benefits, the premium on the first $50,000 worth of coverage is tax exempt.

To offer group life insurance, you'll need to find a broker, decide on a plan design, and choose an insurer. While the process of obtaining coverage is very similar to a search for health insurance, a group life plan's features are very different.

First, you will need to decide how much of a benefit to give. Probably the most popular way to structure the plan is to have a payout based on a multiple of salary. Among small businesses, a 1-2x multiple is popular. Other alternatives include granting a flat amount for each employee, putting a cap on the benefit if it based on salary, or creating different groups of employees, with each group receiving a different payout amount.

Although you have the option to decide otherwise, most small business group life insurance policies are designed to apply only for as long as the employee is with the company. This is known as a group term life policy. Group whole life and group universal life policies, which provide permanent coverage, are also available but are typically only made available through large institutions like a university since the costs can be high.

Figuring out who pays for this benefit is another consideration. You can pay for the entire premium, which is known in industry circles as being "non-contributory." You can also choose a "contributory" plan that requires employees to pay for some, if not all, of the premium. Typically, rates are about 10 percent cheaper for non-contributory plans, with contributory plans requiring a minimum 75 percent participation rate. Pricing is about 20 cents to 25 cents per $1,000 worth of coverage for a contributory plan, but ultimately depends on your company's employee census information.

If you decide to sponsor a contributory plan, you will probably want to provide one with more features to make it more attractive to your staff. Popular features to add to the basic policy include making the policies portable, being able to cover the spouse as well, and providing coverage for accidental death and dismemberment (AD&D) situations. Offering additional coverage on top of the basic benefit can be another plan feature to offer.