Group Life Insurance

A group life insurance policy is often one of the first benefits introduced at an organisation. It is designed to provide financial protection to an employee's loved ones should the worst happen.

A tax free lump sum is paid promptly to their beneficiaries should an employee die whilst in service. Life assurance is a very simple product in its design and as such is a low cost effective way to provide for your employees.

When implementing a new group life assurance scheme it is important to ask a range of providers to quote. Each insurer has their own methods of underwriting and as such will place varying levels of risk on you policy, the higher risk the insurers views your pool of individuals the greater the premiums.

As an independent insurance intermediary we will always review the whole of the market when looking to set up a new policy. Where we are dealing with insurance day in, day out we have the economies of scale with the insurers to negotiate better rates than you would be able to going direct.

We understand the ins and outs of the policies available and the terms and conditions attached. Our service includes a recommendation report covering the key aspects of the most competitive insurance policies with a recommendation of the policy we think best suits your organisation and your budget.

In setting up a scheme you will need to decide upon the level of cover you would like to provide employees. Policies tend to be designed with a level of cover that is set as a multiple of salary. The level of cover provided can range from as little as 2 x salary often up to 12 x salary.

The level of cover can vary by seniority within an organisation and also across industry. Where life insurance has become a benefit expected by employees it is now more a hygiene factor than a differentiator.

It is important to align yourself with your competitors, although offering a greater level of cover may not sway the best recruits decision offering a lower level of cover may leave them looking less favourably at your proposition

The group term life insurance premiums incurred will depend on a number of factors, one of which is the average age of your workforce. It is no secret as we age so we are getting closer to the inevitable. The insurers take this into account when quoting; the older the average age of employees covered on the policy the more expensive the premiums.

Some locations are considered higher risk than others when it comes to quoting life insurance premiums, the higher risk the location of your offices the greater the premiums.

Group term life insurance is designed to provide a tax free lump sum should the worst happen. Without a trust the payout on death will be added to the value of the employees estate and subject to any inheritance tax.

Eventual payment can be delayed waiting for a legal process called grant of probate to determine who gets what, which in itself can take up to six months, and sometimes longer if they do not have a legally valid Will.

It is important to set up a trust when implementing a new group life scheme, the loved ones of the deceased will still be facing the monthly financial obligations such as the mortgage and monthly bills.

Placing the policy in trust will mean prompt payment of the sum assured to the beneficiaries and it will be paid from a tax free environment.

If you are looking to implement a group life insurance policy or review an existing arrangement then we are in a great position to help you. With our expertise in the insurance industry and your knowledge of your organisation, together we can design the most appropriate cover and ensure the most competitive premium rates from the insurers.

For more useful information covering group risk products and employee benefits the CIPD provide a useful guide as well as the government run businesslink.gov.uk site.