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What Is Group Life Insurance?
Group Life Insurance is an innovative way for a business to provide financial
protection for groups of employees
Group life insurance is a type of policy that provides protection to a group of people or employees within an organization. It’s an important form of financial security for those in the group, as it pays out a lump sum if someone passes away.
Group life insurance policies can be found in the UK, providing both employers and employees with valuable protection.
This policy pays out a lump sum to the beneficiaries if someone from the company dies during the period covered by the policy. The amount paid will depend on how much cover each person has through their employer. It’s typically offered as part of an employer’s benefit package and allows companies to provide additional peace of mind for their staff without having to pay hefty premiums for individual plans.
What Does Group Life Insurance Mean?
It is a life insurance policy that helps businesses support the spouses, partners or families of their employees if they should pass away while in the company’s employ.
The kind of support offered varies but in all policies, a lump sum benefit is paid to surviving partners or family members. This can be put towards funeral expenses, paying off equity on a shared property to reduce mortgage repayments or however else the employees’ surviving partners or family see fit.
Some policies also include bereavement counselling for the surviving families of departed employees. Some policies may also have an optional dependent pension. This allows businesses to provide a pension for employees’ spouses or even their children.
Some providers will also cover employees’ partners or spouses through a separate Group Life Insurance policy. Although cover may vary depending on policy and provider, having a policy in place can be highly advantageous both for businesses and their employees.
Why do I need Group Life Insurance?
Your company could do better with happy employees. Group Life Insurance
is a way to improve happiness in a company.
Although it is not a statutory requirement for businesses, there are many reasons why businesses of all shapes and sizes should consider it essential. It is highly advantageous for businesses that have a strong ethical focus and want to be able to put their money where their mouth is in terms of treating their employees well.
Offering Group Life Insurance as an employee benefit makes you highly desirable as an employer and this can help you to attract the top tier talent which will help your business operations go from strength to strength. If your competitors do not offer this as a benefit, you can ensure that you will recruit the cream of the crop at their expense. But more than that, it demonstrates to employees that you genuinely care about their well-being, and when you demonstrate your commitment to your employees, they tend to reciprocate.
What’s more, under current UK tax laws, your Group Life Insurance premiums will usually qualify as an allowable business expense. Thus, you can keep your overhead costs manageable while also providing a vital form of support for your employees.
Employees and their families benefit too. As well as a lump sum payment and access to emotional support, they can rest assured that the payments they receive are not subject to inheritance tax or other additional taxes. This means that they can put the money you give them to its best use as they see fit.
How does Group Life Insurance work?
Different industries and sectors carry varying degrees of risk.
Group Life insurance cover can be applied to any employee regardless of their role in your company, their age and even their physical health. There are no medical questions to be answered and employees are covered regardless of the cause of death. The insurer bases the cost of the premium on the risk factor presented by the workforce as a whole rather than its individual constituent members.
Factors considered include the ratio of women to men, members’ ages and the kinds of jobs they perform as well as the nature of the company itself. Different industries and sectors carry varying degrees of risk.
Cover usually amounts to one or two times the covered employee’s annual salary, although some policies pay out as much as four times an employee’s annual salary. While the cover affects the employee, the employer is the policyholder rather than the employee.
For more information on what constitutes a group life policy, you can check out the HMRC rules and regulations.
What Does Group Life Insurance Cover?
Group life insurance offers many options. For starters, it can provide financial support in the event of death or disability due to illness or injury.
Group life insurance coverage can include:
* Death benefit – A lump sum payment upon the death of a policyholder
* Disability benefit – A lump sum payment if a policyholder is unable to work due to illness or injury for a certain period of time
* Living expenses – A monthly income paid out if a policyholder cannot work due to disability or unemployment
* Expanded coverage – Additional coverages such as critical illness, travel accident, or accidental death coverages may be available depending on the insurer’s offerings
How Much Does Group Life Insurance Cost?
Generally speaking, the cost of group life insurance varies depending on several factors like the size and age of your group, as well as any specific benefits you choose to include in your policy. That said, the most important factor in determining the cost is usually the amount of coverage you need. Higher amounts of coverage will typically mean higher premiums, so it’s important to weigh your options carefully when deciding how much coverage is right for you.
What Are The Benefits of Group Life Insurance?
Firstly, it’s a cost-effective way to provide life cover and is much cheaper than arranging separate life insurance policies for each employee. Here are some key benefits of group life insurance:
- All members are automatically included
- The employer typically pays all or part of the premium
- The coverage often remains in effect even after employees leave the company
- Dependents may also be covered under the policy
- Premiums are usually fixed and easy to budget for
Who Are The Uk’s Prividers?
The big names in the industry are well known and trusted, such as Aviva and Zurich. These companies offer a wide range of policies, so you’ll be able to find something that meets your needs. They also have experienced advisors who can help you decide what type of cover is best for your business.
For smaller businesses or those looking for more tailored cover, there are a number of specialist providers out there too. Companies like The Exeter provide bespoke solutions tailored to individual requirements. And with competitive rates, they can be a great option for businesses looking for affordable protection.
Ultimately, whichever provider you choose, it’s important to make sure that you’re getting the best possible deal for your employees’ life insurance needs. Researching different providers will help you make an informed decision and ensure everyone at your company is properly protected against unexpected events.
Companies under 10 employees may not be able to offer group life insurance. In which case relevant life cover may be more suitable.
Is Group Life Insurance A Taxable Benefit?
For starters, it’s important to note that the taxability of group life insurance depends on several factors. Generally speaking, if the employer pays the premium, then any benefits payable to the employee or their dependents are usually subject to income tax. On the other hand, if the employee pays all or part of the premium themselves and they don’t get any additional benefits apart from those specified in their contract, then these policies are usually not taxed.
However, there are some other considerations to bear in mind when determining whether group life insurance is a taxable benefit or not. For instance, if employers pay for additional features such as terminal illness cover or waiver of premium cover then these benefits may be subject to tax – though this will depend on individual circumstances and should therefore be discussed with a financial advisor before making any decisions.
It’s also worth noting that while most forms of group life insurance are exempt from inheritance tax, there may still be some cases where it could be subject to this tax – again, advice should be sought from a qualified professional before taking out a policy. Ultimately, many factors can affect whether group life insurance is a taxable benefit so it’s important to research your options carefully before committing.
Group Life FAQ
Group Life Insurance differs from individual life insurance policies in a number of ways, so it’s advisable to encourage your employees to take out their own policies on top of your group cover. Differences include;
- Cover ends when the employee stops working for you.
- Cover cannot be changed as it is linked to the employees salary.
- Employers rather than employees are responsible for all administration and liaising with the insurer.
While Group Life Insurance has its undeniable benefits, some employees may also wish to consider topping it up with their own policy.
Different companies will also have different age cut-off points in place. For example, some may only cover people up until a certain age such as 65 or 70 while others may provide coverage right up until a person is 90 years old. It’s always best to check with your provider before signing up for a plan.
It’s worth noting that some providers may also offer special rates and discounts for people who fall into certain age brackets or other criteria such as occupation or health status. It’s worth researching these options carefully so that you can get the best deal possible on your group life insurance policy.
Cover normally ceases when employees reach the state pension age of 64 for women and 65 for men.
If you have any further questions we’d be delighted to discuss them with you and help you to find the right cover for your business. Call us today on 02071128844
Why Choose Us?
- MyKeyManInsurance.com started in 2008 we are the longest-serving business protection specialist in the UK.
- You deal directly with us we do not pass on your details to any third parties.
- The ONLY Website where you can quote and apply online.
- FCA-authorised advisers with years of experience in business insurance.
- We are a whole market broker able to quote from all the UK providers.
- GUARANTEED Lowest Group Life Insurance Rates In The UK.
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Still have questions about Group Life Insurance? Hopefully our FAQ will help:
How does Group Life Insurance differ from Personal Life Insurance?
Group Life Insurance differs from individual life insurance policies in a number of ways, so it’s advisable to encourage your employees to take out their own policies on top of your group cover. Differences include;
- Cover ends when the employee stops working for you.
- Cover cannot be changed as it is linked to the employees salary.
- Employers rather than employees are responsible for all administration and liaising with the insurer.
Are There Any Age Restrictions For Group Life Insurance?
Different companies will also have different age cut-off points in place. For example, some may only cover people up until a certain age such as 65 or 70 while others may provide coverage right up until a person is 90 years old. It’s always best to check with your provider before signing up for a plan.It’s worth noting that some providers may also offer special rates and discounts for people who fall into certain age brackets or other criteria such as occupation or health status. It’s worth researching these options carefully so that you can get the best deal possible on your group life insurance policy.
Is there an age at which employees become ineligible for cover?
Cover normally ceases when employees reach the state pension age of 64 for women and 65 for men.
What do I do if I still have an unanswered question about Group Life Insurance?
If you have any further questions we’d be delighted to discuss them with you and help you to find the right cover for your business. Call us today on 02071128844
Is there an age at which employees become ineligible for cover?
Cover normally ceases when employees reach the state pension age of 64 for women and 65 for men.
What do I do if I still have an unanswered question about Group Life Insurance?
If you have any further questions we’d be delighted to discuss them with you and help you to find the right cover for your business. Call us today on 02071128844
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UK’s Number One Business Protection Specialist.
