24/08/2023

5 mins

Group Life Insurance is an employee benefit that will pay out a lump sum to employees’ families if they pass away.

This lump sum can be used for anything, from supporting the family finances, repaying part of a loan, or helping the family afford a funeral.

To give you a better understanding of the benefits of Group Life Insurance, we have picked our top 5 reasons why businesses should consider setting up a policy.

Support Employees and Their Families

Families and careers do not always operate in sync and it’s here UK employers can make important changes that allow their employees to have a fulfilling and secure family life outside of work, including the introduction of an employee benefits such as Group Life Insurance.

55% of SME workers admitted in our 2018 Employee Benefits survey that they regularly feel stressed with money troubles, work and family responsibilities topping the list of causes.

26% of UK workers have no idea how their family would cope financially if they passed away. Others predicted that their family would need to sell their home or rely on government benefits to get by.

Nadeem Farid, Head of Employee Benefits at Drewberry

One of the ways employers can help employees deal with stress includes the introduction of group insurance products like Life Insurance.

The financial support they offer can help to relieve some of that financial pressure that causes employees so much stress.

Nadeem Farid
Head of Health & Wellbeing Benefits

Attract New Employees

Our 2018 Employee Benefits Survey revealed a lot about what employees want from a benefits package compared to what their employers actually offer.

29.4% of employees consider benefits and perks to be one of the top influencing factors when deciding on a new employer, so a great benefits package is one way for employers to make themselves stand out more among competing businesses.

29% of SME employees listed Group Life Insurance as one of the top employee benefits they would want from their employer. However, only 13.7% of employees are actually covered by a Group Life Insurance policy. This indicates that there is considerable room for employers to put together competitive employee benefits packages that can reel in new talent.

EXPERT TIP 🤓
With 47.7% of employees thinking about switching jobs in the next year, now may be the perfect time to put together a benefits package that will not only make your current employees happy, but catch the eye of outside talent seeking a change of scenery.

Employee Assistance Programmes

Employee Assistance Programmes are there to support employees and their families, helping them better manage their health and finances.

These are packages that accompany many group insurance policies, offering a range of services and benefits that help employees better manage their health and happiness on a regular basis and avoid needing to claim on their insurance policy.

While the sorts of benefits your EAP covers will depend on your insurance provider and their unique offerings, a small sample of some of the valuable benefits these packages offer includes:

Advice services and helplines
Online portals, knowledge hubs and apps for general information and advice
Probate advice
Bereavement counselling
Over the phone or face-to-face counselling
Financial guidance (e.g. debt counselling).

These services can be accessed by employees at any time and some are even available to their families. They are valuable for so many reasons and even without the attachment of life cover can be important components of a comprehensive employee benefits package.

Cost Efficient Benefits

When it comes to employee benefits, Death in Service is probably one of the most affordable, cost effective insurance products you could offer, as well as being one of the most in-demand.

Joe Toft, health & wellbeing expert at Drewberry

Group Life is tax efficient. It is not considered a benefit in kind, which means that there is no income tax to pay on the cover for the employees, and is usually eligible for corporation tax relief for the employer.

Joseph Toft
Senior Employee Benefits Consultant

Death in Service is written into trust with the employer listed as trustee, which means that the payout falls outside of the person’s estate and is not affected to inheritance tax.

Not Usually Medically Underwritten

Individual insurance policies require applicants to undergo an underwriting process, which determines the cost of the policy based on the health and lifestyle of the individual. A greater risk means that the cost of premiums is likely to increase or might even result in the person being denied cover completely. However, this process isn’t typically applied to group policies.

Most insurers are unlikely to worry about underwriting each employee individually unless a specific employee’s cover exceeds the free cover limit.

This lack of underwriting means that many employees who may not be able to get cover or who may have to pay excessively high premiums for a personal Life Insurance policy are able to get either free cover from their employers.

For employees of a certain age or in poor health, a Group Life Insurance policy could be a saving grace, giving their family valuable financial support that otherwise might not be available to them.

Compare Company Life Insurance Quotes & Get Expert Advice

Group Life Insurance is a staple employee benefit but it’s not the only one available.

The right protection for you and your business will all depend on the needs of your staff, we are here to make sure you can make an informed decision and find the most competitive premium for your business.

Why Speak to Us?

We started Drewberry™ because we were tired of being treated like a number.

We all deserve a first class service when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

We are award winning 🏆 independent insurance advisers who work with all the leading UK insurers
You’ll speak to a dedicated expert from start to finish
We are very proud of the 3763 and growing independent client reviews rating us at 4.92 / 5
We are authorised and regulated by the Financial Conduct Authority. You can find us on the financial services register here 🧐
Claims support when you need it most.

If you need any help reviewing an existing Business Life Insurance policy or you are looking to set-up a new scheme please don’t hesitate to call us on 02084327333 or email help@drewberry.co.uk.