What is Group Life Insurance?
More commonly known as Death in Service, Group Life Insurance is one of the most common employee benefits, that’s specifically designed to financially support an employee’s loved ones, should that employee sadly pass away.
Types of Group Life Cover
- Tax-free lump sum – Either a fixed amount or a multiple of an employee’s salary (typically 3x) which is paid to the employee’s dependant(s) in the event of their death.
- Death in Service pension – This is either a fixed amount or percentage of the employee’s salary, which is paid monthly to the dependant until their death. Often this can be given in addition to the lump sum or on its own.
How a Group Life policy works
You can choose whether you want to offer this benefit to all your employees or just a specific area of the business, as well as the level of benefits provided. The policy is then either placed under a Trust that’s been set up by you or under the Insurer’s Master Trust.
There’s a common misconception with Group Life Insurance in that it’s expensive and it’s a taxable benefit for both employers and their staff. However, the premium you pay is considered as a business expense and is not seen as being a ‘benefit in kind’, making it a really affordable employee benefit.
Benefits as an employer
- Attracting and retaining talent – Offering Group Life Insurance shows that you really care about your employees and their families, which will make it easier to recruit and keep staff.
- Bespoke to your business – Group Life policies are designed to be flexible so you can create one that best suits you and your employees.
Benefits as an employee
- Peace of mind – With Group Life Insurance it gives your staff the reassurance, that should the worst happen, their loved ones are looked after.
- More than just money – There are typically other benefits included as part of a Group Life policy - e.g. Employee Assistance Programs, Bereavement and Probate support.