Life insurance can be a great motivational tool for your employees when used right. It might even help you lower your payroll costs while still motivating your employees to work harder.

Life insurance is an agreement between an insurance company and a policy holder. According to the agreement, referred to as a life insurance policy, if the policy holder passes away his heirs will receive a lump sum cash pay out from the insurance company.

3 Variable Universal life insurance. This is similar to universal life insurance with cash account.

Employers can use a life insurance policy to encourage workers to accept a job, and to be motived in the workplace.

The best way to ensure this is by the employer purchasing a life insurance policy with a significant pay out on behalf of his employees.

For instance, a start up which cannot afford to pay an above market salary to its employees can offer them a free life insurance policy.

The employee would know that as long as he continues to work at the company his beneficiaries would be protected.

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To make this course of action affordable for the employer term life insurance could be purchased.

Term life insurance is significantly cheaper than whole life insurance, and can offer death benefits of as high as $1,000,000 for as little as $20 a month.

Cash value is another beneficial feature of whole life insurance.

If an employee leaves the company the employer would simply stop paying for the term policy and let it expire.

Both the employer and the employee benefit from the use of life insurance since the cost is relatively small for the employer, while the potential benefit to the employee's beneficiaries is quite large.

Waiver of Premium This feature pays the premium on the life insurance if the insured becomes disabled because of injury or illness.