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Group Life Insurance

Peace of mind for your employees families when needed the most:

Helps you attract and retain the best staff
A lump sum cash pay out to your employees family
Available for businesses with two or more employees
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What is Group Life Insurance?

Group Life Insurance/Employee Life Insurance, or as it’s historically known as ‘death in service insurance’, is arguably the UK’s most popular employee benefit.

Group Life insurance provides a lump sum payment to your employees family or next of kin, should anything happen to them.

The amount the employee’s beneficiary will receive will be chosen at the start of the insurance contract.

Amounts can vary depending on scheme set up; e.g. length of service or seniority etc.

Group Life Insurance Fact

Why do I need Group Life Insurance?

One of the main reasons employers should consider providing Group Life Insurance is that it will allow them to offer some financial support to the families of their employees at a time when they are going to need it most.

At Hooray, we are strong believers that employees are the most valuable asset to your business.

Anyone has the potential to be a brilliant employee, a sprinkling of  good faith from their employer goes a long way.

Recent studies show the average cost of business life insurance to be £115 per person and we believe that the value added to your business, always outweighs the cost per employee per year.

Protecting your employees with life insurance has many benefits that apply directly to your business.

We have countless feedback from employees that this benefit is well received at the company.

It makes  employees feel valued and aren’t just another number in the corporate machine, as well looking after their family’s welfare.

When considering employee benefits, we also have to keep an eye on the competitiveness of the UK job market.

Companies should do everything they can to attract and retain the best talent; a strong employee benefits package is one of the easiest steps you can take as an employer to meet those needs.

Business Life Insurance Fact

How much does Employee Life Insurance cost?

Due to our wealth of experience dealing with employee life insurance schemes, we understand the best way to navigate the market from a cost vs cover perspective.

We don’t usually like to provide prices upfront as we no two clients are the same in their requirements.

In 2017 Swiss Re (a benchmark as one of the World’s largest reinsurance and insurance companies) launched the Group Watch report where they reviewed all death in service insurers business to asses the group life market.

One of the main findings from their report was the average cost for employee life insurance being £115 per employee per year.

The calculated average cost per policy is based on all of the schemes in-force that the industry has, so naturally, the larger the workforce, the lower the cost per employee.

Insurers will usually consider the following when pricing a scheme:

  • Average age of employees
  • Occupation of employees
  • Location of workplace(s)
  • Total sum to be insured
  • Employees that are off sick
  • If there is any overseas travel

If we take the above into account, we will often see the cost of insurance for SMEs to be more per head than for medium to large corporations as larger clients have more staff, hence a higher headcount to ‘pool’ the risk.

We have covered more on group life pricing in our post on the Hooray Knowledge Hub ‘Group Life Insurance: The Good, The Bad and The Pricing‘.

Employee Life Insurance Fact

Is the Group Life Insurance premium taxable?

Employee Life assurance premiums are paid for by the employer so a great benefit for employees is that premiums are not usually treated as a P11D benefit, so there is no additional tax charge for employees to pay.

Employers can usually also benefit from the fact they are able to claim these premium payments as a business expense for corporation tax relief.

In the event of a claim on the death in service policy, the benefit payments can also be paid tax free through the use of a trust the employer has set up or a master trust that has been provided by the insurer, which will prevent any inheritance tax concerns on the payment.

As with all taxation queries, we receive on our death in service insurance policies we suggest seeking advice from a tax expert or your accountant.

Our team at Hooray Health & Protection however are happy to talk through the basics and signpost you to the right area of expertise.

Death In Service Insurance Fact

Is the Group Life Insurance benefit taxable?

SMEs are our bread and butter here at Hooray (we love working with you!) so most of the Clients that we deal with are new to the market.

Of those clients, 90% of the cases we work with involve using what is called a Master Trust.

Any group life insurance policy needs to be arranged using a trust to ensure the nominated beneficiary receives the lump-sum benefit in the most tax efficient manner.

Employers can arrange a trust themselves, but this can be costly if paying a trust expert to arrange.

It can also be very time consuming and leaves all claims administration down to the employer.

In every case possible we will advise clients to set up a master trust if possible for ease and simplicity.

Master trusts are arranged by the insurers and a nominated trustee (usually respected solicitors) to handle all claims for members of the master trust.

Currently all insurers master trusts are free to use for their clients, all clients need to do is complete the form and they will set up everything for you.

Insures will then arrange all claims administration on your behalf.

Certain tax implications mean companies with high earners may not be able to use a master trust if we set up their policy on an Excepted basis (rather than a Registered basis).

We will always advise on how best to use the various types of Death In Service policies available, taking into consideration differing earnings within the business’ payroll.

Fortunately, we have started to see certain insurers operate Excepted master trusts to bypass alleviate this symptom.

At Hooray Health & Protection however we will always help find the best solution for you.

Does Employee Life Insurance have added value services?

Death In Service insurance has always been a very price driven product as most insurers’ propositions, are the same as each other’s.

If we take a look at the panel of employee life insurance companies we work with, we see that every insurer has a probate and bereavement service and a master trust.

We have explained master trusts in depth in the above paragraphs but our protection experts can answer any other queries on 01273 222805

Probate and Bereavement services though are included with every insurer we use at Hooray Health & Protection.

Most insurers will provide employees affected by a bereavement with telephone counselling and up to five face to face counselling sessions.

Some insurers will allow family members of the employees with access to this service also, for no extra cost.

If employees covered under the policy are an executor and need assistance with the probate, some death in service insurers provide assistance free of charge.

We are also starting to see new death in service insurers leading the way by providing ‘Employee Assistance Programmes‘ or well-being applications using technology and innovation, we are hoping will inspire the market to enhance their employee benefit propositions within this particular arena.

When considering employee life insurance for your company it is the added value services that should be considered alongside cost.

Company Life Insurance Fact

Why choose Hooray Health and Protection for Employee Life Insurance?

When you speak to our team of experts at Hooray Health and Protection, you know you’re in safe hands.

Our background has provided us with a unique insight into the industry and how insurers work behind closed doors.

We have the relevant experience and knowledge to allow us to provide our clients with the policies best suited for them at the most competitive price available.

It is our aim to ensure that you protect one the most valuable assets that your business has- your employees.

If you are considering taking out group life insurance or you have a policy already but your broker isn’t pulling their weight (or charging you too much!) then give us a call for a free review today.

Please provide your comments, questions or feedback

Help & Support

If you have any questions, please call us on 01273 222805 or email our director at [email protected]

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