Group life insurance or death in service as it is otherwise known, is an employer sponsored insurance scheme which provides a lump sum in the event an employee dies during their employment.
Typically, these arrangements are offered to a workforce as part of a wider, more complete, employee benefits package and have been found to positively affect the mental wellbeing of the workforce.
An employee insight report by Capita (2018) discussed employee benefit requirements in the workplace and found that 34.5% of employees wanted life insurance. This was considered to be the third most important workplace benefit, with 40.5% of married employees with children under 16 considering life insurance of value.
Typical benefits can include:
Financial support for the bereaved family
A lump-sum benefit is provided if the employee dies in service. There are no limitations on how the sum can be used.
Ongoing emotional support
Many policies include bereavement counselling for the employee’s family, as well as colleagues.
No inheritance tax liability
Often, the lump sum provided will not form part of the deceased estate and therefore there is no inheritance tax liability for the beneficiaries.
No additional tax liability
The lump-sum in most cases will not be classed as a ‘benefit in kind’ meaning that there will not be any additional tax payable.
Of late, we have seen an increase in the cost of these policies. Yet many organisations have not discussed finding alternative arrangements, despite the fact that there could be more cost-effective alternatives available.
Is it time to review your existing arrangements or implement some group life cover? If your renewal costs have increased unexpectedly this year, then maybe it is.
If you would like a discuss a quote, or have any questions regarding the implementation of suitable group risk initiatives, please contact us on 0345 357 8910 or email firstname.lastname@example.org.