What is Group Life Insurance?
This is a life insurance policy taken out by an employer on behalf of their employees, as a staff benefit. It will provide a tax-free lump sum payment to the employee’s family or their chosen beneficiaries upon the death of the employee.
The insurance gives your employees the added benefit and comfort of knowing if they were to pass away, their family or loved ones would receive a lump sum of money at a time when they need it most. This can offer employees peace of mind and also help towards retaining your key members of staff.
Contact Spectrum Financial Advice today for a fee-free, no obligation review to find out how easy it could be to protect and secure your future.
Please also take a look at our frequently asked questions (FAQs) towards the end of the page.
Tailored Cover
With Spectrum FA, you can choose from a range of flexible policies to create a comprehensive package of benefits for your employees, providing peace of mind.
Comprehensive Cover
Spectrum FA will search the market to find a comprehensive Death in Service package with competitive premiums for your business.
Attractive Benefits
With our expertise, we will recommend suitable cover for your individual needs and you can choose the additional flexible benefits you require. We will also assist you and / or your family in the event of a claim.
How Does Group Life Insurance Work?
Group Life Insurance will, in the event of an insured employee passing away pay out a pre-determined lump sum benefit to the deceased individual’s family or estate. This can help the family to continue their lifestyle and standard of living.
As the policyholder, your company is responsible for payment of premiums and will determine the:
- Number of staff members to be covered
- Cover level for each employee, which is typically calculated as a multiple of their salary or a specific benefit amount
- Optional extras/add-ons to be included such as Health and Wellbeing Services, bereavement counselling, second medical opinion, probate helpline
Add-ons or optional support services may, for example, consist of a dedicated information helpline for emotional support to support employees in the event of long-term illness or bereaved children and family members, a dedicated claims team, employee assistance programme and/or other optional benefits (depending on what is offered by any given policy). There may be an extra cost for some cover options.
Insurance cover recommended by Spectrum FA are underwritten by the most trusted providers in the industry – meaning they will provide your workforce with reliable cover throughout their employment with you. Learn more.
The employer is the policyholder and pays the premium, and the employee’s family are the beneficiaries. The death benefit is paid to the beneficiaries if the event of an employee’s death, while they are employed.
What are the Benefits of Group Life?
A Group Life Insurance policy is an important part of an employee benefits package. It allows you to offer your current employees tax efficient flexible life cover / death in service benefit that will provide their families with a comprehensive support (financial & practical) package in the event of their death. For example, benefits are paid as a tax-free lump sum to the employee’s family or beneficiaries and can sometimes be paid as a dependents pension. There will also be no inheritance tax to pay.
These schemes also benefit employers in that they enhance their standing as generous, caring & supportive (and consequently attractive) employers – which will, of course, make it easier for them to:
- Retain existing staff members of key importance to the company’s profitability and future growth, and
- Attract more high-calibre employees
FAQs
View some of our frequently asked questions that some of our customers have asked.
If you are a UK business who employs staff, then you are eligible to take out Group Life Insurance on behalf of them. In most cases the majority of employees will not need to provide medical information, disclose pre existing medical conditions or complete any medical underwriting, unless they go above the free cover limit (FCL), which is usually set at a high level. This type of policy is also known as group life assurance or group death in service cover.
With our access to a range of policies available in the market and our experience of working with both large and small companies, we are able to source the right level of cover for your needs, meaning your employees can take advantage of the valuable benefits.
So, whether you have only two members of staff or employ hundreds, we will recommend suitable insurance cover for you and your employees.
Group Life policies can provide a multiple of an employees annual salary, typically between 2 and 5 times. However, there is the option to provide higher income multiples if this is suitable for the business.
There is also an option for the employer to proceed with a ‘flat rate level of benefit’ amount, for example, £250,000 life cover, instead of a multiple of the employee’s salary.
The scheme can be run as a wholly registered Group Life or wholly excepted Group Life scheme.
There is also the option for the scheme to be run under a ‘master trust’, where Independent scheme trustees will take care of the full administration of the trust, including reporting to HMRC.
If a master trust is the most suitable option for your company, this will be set up on your behalf, directly with the insurer, at no additional cost.
Providing insured employees with peace of mind that their families will be “looked after” financially if they pass away is key in what would be an extremely difficult time, this cover could improve their attitude towards work, morale & concentration, which in turn increases/enhances:
- Their productivity (and consequently your business’ profitability)
- Their loyalty to your company, which will, of course, make it easier for your company to retain high-value employees
- Your company’s reputation as a generous, responsible employer, which will in turn make it easier for you to attract new first-class employees
Considering the benefits for both employees and employers, Group Life Protection is an area companies with any number of employees should consider.
Are you ready to give your workforce peace of mind? Request a review (free & without obligation) now.
Premiums for Group Life depend on the:
- Number of insured employees
- Cover level/income multiple for those employees
- Additional benefits and add-ons to help employees such as 24×7 confidential bereavement helpline
Other factors used to calculate premiums include individual employees’:
- Age – Older employees will of course mean higher premiums
- Occupation & industry
The nature of your business may also add to the cost (i.e. the level of occupational risk your workforce is exposed to while in your employment).
The employer pays the premiums, which are classed as a business expense and not classed as a benefit in kind.
Considering costs also vary between policies and providers, finding an affordable scheme can be confusing, so obtaining expert advice from a financial adviser is essential.
Spectrum Financial Advice will recommend suitable cover for your workforce at attractive, competitive premiums. Contact our team of group protection experts now to find out how.
Spectrum Financial Advice offers tailored protection advice whatever the circumstances.
Being independent, we have access to the leading insurance providers in the market, at competitive premiums. We provide expert regulated advice and will tailor the cover to match the needs of you and your business.
We do not charge you a fee for our advice or service and you will speak directly to an expert who will guide you through the process and handle all the paperwork on your behalf.
If you would like to take advantage of our expertise and find out how we can assist you with the necessary advice on a scheme for your employees, please get in touch with us today. You can complete the contact form on the website and one of our advisers will get back to you as soon as possible, or you can email us at info@spectrumfa.co.uk or phone us directly on 01279 315 013.
Would you like a Quote for Group Life Insurance?
Compare Top UK Insurers
You may also be interested in
these services…
We provide expert advice on a range of Personal Protection. You can protect your family and loved ones in the event of death, critical illness, or loss of income, due to illness or injury. See below some of these services.