It sees the company pay Life Insurance premiums on behalf of its workers. In return, the employees receive a Death in Service benefit worth a multiple of their salary to be paid to their family if they were to pass away.
The death can occur anytime, anywhere – it doesn’t have to be in connection with the worker’s job.
Group Life Insurance is often one of the first employee benefits introduced because:
The main barrier to entry for a Group Life Cover benefit is a minimum number of employees. Most providers require at least five employees for you to get cover, but some will accept as few as two employees.
Other stipulations include:
In addition to the minimum terms imposed by the provider, some companies choose to add their own conditions. These include putting in place a minimum time period an employee must spend at the company before being granted cover, or the cover only being provided to those with a stated seniority (e.g. managers only).
There are a number of reasons why it can be beneficial for employers to provide Life Insurance to their employees, not least because it’s an appreciated benefit and an excellent way to make workers feel valued, attract new workers and retain existing ones.
It also provides them with the comfort that their loved ones will have some degree of financial security should the worst happen.
Other reasons to offer Employee Life Assurance include:
To set up Group Life Protection, you’ll need the following information about your employees:
This is necessary for the insurer to price the risk of taking on your workforce. Although it seems like a lot of data, it really is required and we unfortunately can’t move on without it.
It is best to send this data to at least 3-4 UK insurers so you can get a reasonably good idea of what the market has to offer. In addition to the information you provide with regards to your employees you will also need to define the type of cover you wish them to provide quotes for which will include:
When you have sent the providers the necessary information it can take a couple of weeks with some chasing to receive your quotes back.
When you have received your quotes you will need to ensure you are comparing like for like offerings by checking key policy factors such as:
Once you have analysed your quotes and come to a position where you have a provider you want to move forward with you will need to complete the relevant application forms and ensure there is a suitable trust set-up and in place for the policy.
Once your policy is ready to go live the most important thing to do is communicate it to your staff. Whether this be through presentations, email or other means the value of the benefit is only realised when those who receive it are aware of its value.
With new joiners and leavers and ensuring you have the most competitive cover there is inevitably some ongoing administration you will have to deal with, some insurers provide a lot of support with this while others require you to do it all yourself. It is important you are aware of your requirements and keep your scheme data up to date with your payroll data.
One of the main reasons firms choose to work with an independent expert such as ourselves is that not only do we do all the heavy lifting in terms of going out for quotes and getting you set-up in the first place but we will look after the ongoing administration as well.
Head of Employee Benefits at Drewberry
I had the pleasure of dealing with Jake Mills in organising my insurance. Jake was fantastic to deal with — his patience and understanding really helped.