Group Life insurance is a type of cover provided by a company for its employees. The cover provides a lump sum on the death of a member of a scheme. Companies are increasingly offering benefits such as Group life Insurance in order to reward existing employees and to attract new talent.
How does it work?
Also known as ‘Death In Service’ or ‘Group Life Assurance’ the benefit is an insured Cash Lump Sum payment to the dependents/beneficiaries of an employee if the employee dies whilst covered by the policy. The policy pays out on death for any reason (including suicide) and at any time whilst the employee is covered – the employee does not have to die during work hours or on work premises.
Employees are typically covered for a lump sum based on a multiple of salary. Usually 2, 3 or 4 times salary are common multiples, but this can be higher or lower or even a fixed amount. There is a growing trend for employers to offer a base level of cover and allow employees to purchase additional higher levels of cover via salary deduction.
The lump sum payment is made tax-free (up to certain levels) and the scheme ‘Trustees’ have oversight on who the benefit is paid to. Each insured employee is entitled to choose their own beneficiaries and employees should be reminded on a regular basis to update their choices if necessary.
Directors, Partners and employees can all be insured and in most cases are able to take advantage of the ‘Free Cover Limits’ offered by Group Life insurers. The Free Cover Limit is a level of cover offered by the insurer without the requirement for medical questions
Coverage will remain in place for employees until employment is terminated or until the specific term of coverage ends.
Group Life is often seen as a vital benefit and its provision not only shows a Duty of Care to your employees but also allows them to feel secure in the knowledge that they are able to protect their family’s future. Valued employees are typically more engaged, and this can help improve loyalty and increase work ethic.
Rules around the payment of benefits can differ from country to country and as we are members of a Global Broker network, we can assist employer in relation to providing benefits for employees in the UK, Ireland, and in more than 100 countries worldwide.
How Eppione can help
We can assist employers in setting up a Group Life scheme for the first time or reviewing your existing arrangements. We can help you to decide on a specification of the cover you require so that the policy best suits your company’s requirements and employee demographic. We work on a global basis so will also consider any savings that can be made from Multinational Pooling.
We are independent brokers and can review all insurers. We also advise employers who have existing schemes in place and can check the compliance of an existing policy, that cover is adequate for your needs and that the premium you are paying is competitive.
Our online HR and Employee Benefits platform can help your business to thrive by offering flexible benefits to your employees enabling them to choose benefits that are best suited to their needs.
Eppione is authorised and regulated by The Central Bank of Ireland and The UK Financial Conduct Authority. We are able to provide independent advice and guidance on Group Life or any other Employee Benefits.
If you would like some further information, contact our team today.