Group Life Insurance
- An attractive and cost-effective employee benefit
- Pays a lump sum to an employee’s family
- Available for businesses with two or more employees
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What is Group Life Insurance?
Group Life Insurance provides a lump-sum payment to your employee’s loved ones, should the worst-case scenario become a reality. You might also see it referred to as employee life insurance, business life insurance, and death in service insurance.
In the unlikely but heart-breaking event of an employee’s death, their next of kin will be paid the full amount arranged by the employer prior to the start of cover.
How much does the policy pay out?
The employer also has a few options for the lump sum: they can select a multiple of the employee’s salary or choose a fixed amount for all employees. For example, businesses will typically offer between 2x and 8x an employee’s salary. On the other hand, you may just stipulate a flat amount.
You can also vary the amount of cover offered depending on the seniority of the employee or length of service.
Our team specialises in providing small to medium-sized companies with the best employee life insurance, so contact us today for a quote for your business – our service is completely free!
Why buy Group Life Insurance?
Our absolute favourite thing about providing Business Life Insurance is that individuals who would otherwise be denied cover can still access it. Past medical conditions won’t be a problem, although there are sometimes exclusions for genetically inherited illnesses and high risk activities.
No one wants to think of worst case scenarios, but we all want to know that support is there when it’s needed. In this case, financial support to loved ones and, often, bereavement support too.
Small businesses can often afford life insurance even when they struggle to afford other health and protection policies. You can adjust the payout amount according to your budget.
People like working for companies who look after them and their families. A life insurance policy is a good way to show employees that you care.
As well as bereavement support, some life policies provide a mental wellbeing app too.
If other companies in your industry are providing this benefit, you might want to match them in order to attract and retain the best talent.
How much does Employee Life Insurance cost in the UK?
In all honesty, this is a case of “how long is a piece of string”. Some of the factors most insurers assess are:
- Total number of employees covered
- The average age of employees
- Occupation of employees
- Location of the workplace(s)
- The total sum to be insured (i.e. how much cover you want to provide)
- Number of employees that are off sick
- Any overseas travel
We often see the cost of insurance for SMEs to be more per head than for larger corporations (who have more staff, meaning a higher headcount to ‘pool’ the risk). At Hooray Health & Protection, we don’t think that’s right, so we aim to provide SMEs with the best cover for the best price.
If you’d like a FREE price check for your business, then get in touch with us on 01273 222805 or [email protected].
Looking for Group Life Insurance?
How can I arrange a Group Life policy?
This can be a very straightforward process! Generally, you have two options: go straight to an insurance provider or make use of the free services offered by a broker.
The downside of going direct is that the insurer might not have the best policy for your needs. For example, there might be a cheaper policy elsewhere or you might be able to negotiate a better deal.
But a good broker will compare life insurance policies offered by all the different UK insurers out there to ensure you get the best deal. Anyone with prior experience in this industry will tell you that enlisting a broker is a no-brainer!
Here’s how the process works if you use employ Hooray’s services:
We first review your needs to decide which scheme is best for you. As every business is so different, a broker or insurer should never tell you the right fit for your company until they’ve found out exactly what it is you’re looking for. Initially, we would assess eligibility using criteria such as length of service, staff members who are currently off sick, and what it is that your business does.
Next, we would complete a market review of our panel of insurers and provide you with a full report comparing their price, service, claims, trusts, terms and conditions (and much more!).
Once you have made your decision, we would request the insurer to proceed with your insurance policy and provide you with an invoice to pay within 30 days.
If you need any help adding new joiners to your life insurance, we’ll sort that with the insurer. We’ll also be on-hand to assist with any claims disputes or ongoing questions related to the policy.
When your Group Life policy comes up for renewal, we’ll check that it still provides the best value. If not, we’ll recommend a different provider.
Who are the main Group Life insurers in the UK?
Below are the main players in the Group Life market. However, we can make no general recommendations of any one insurer as it will really depend on the type of workforce you have, including its demographic and size.
- AVIVA
- Canada Life
- Legal & General
- Lutine Group
- MetLife Group
- Pulse Group
- Risk Assurance Management
- Unum
- YuLife
- Zurich
To find out what option works best for you, along with business-specific quotes, then contact one of our friendly team for a no-commitments chat.
Is Group Life Insurance available for small businesses?
It certainly is! Employee Life Insurance isn’t just available for large corporate clients, it’s also reasonably priced for small and even micro-businesses. To establish which product is right for your business, we always review the whole market.
If you have a small businesses then you have two choices:
Group Life Insurance (for 2 employees+): We work with insurers who can quote for companies with as little as two employees and offer very generous cover levels with no underwriting.
Relevant Life Insurance (for sole traders): Even if you’re a sole trader or a one-person band, you can life cover through a policy called Relevant Life Insurance . In this case, you will be require enhanced underwriting i.e. a medical background check.
Does Group Life Insurance cover existing medical conditions?
Group Life Insurance can cover employees for pre-existing medical conditions up to the free cover limit set on the policy. To enable this, we try to always recommend insurers which provide a free cover limit that will cover all employees, even if it’s more expensive.
However, businesses with a smaller headcount may be asked to disclose if any employees have suffered a serious illness in the last 12 months, such as a heart attack, cancer, or a stroke. That’s why we always advise talking through your options with a broker to get the right advice.
Hooray Health & Protection will help you discover the best value Group Life Insurance policy for your business. Our friendly team of brokers will provide you with the best available quotes and wisest advice. Click the quote button below or call us on 01273 222805.
Looking for Group Life Insurance?
Do you get anything else with a Death in Service policy?
Yes, but this will vary depending on the individual provider. The extra support potentially on offer includes:
- Bereavement services
- Probate services
- Employee Assistance Programmes
Most insurers will provide employees affected by a bereavement with telephone and face-to-face counselling sessions; some will allow family members access to this service at no extra cost.
If employees covered under a Group Life policy are an executor and need assistance with the probate, some insurers will also provide this assistance free of charge.
Here at Hooray Health & Protection, we don’t think that money alone is enough to help anyone through tragic events such as a family member’s death. That’s why probate and bereavement services are included with every insurer we use.
We are even starting to see new Group Life insurers go the extra mile by providing ‘Employee Assistance Programmes’ (EAPs). EAPs focus on ensuring the employee’s wellbeing is fully supported. They are offered via online platforms which a team member can use whenever they feel like it. A variety of services are included in this, such as: Cognitive Behavioural Therapy, counselling support, financial advice, healthy living tools and many other things.
When looking at a Group Life policy for your company, it’s worth considering the value of the Employee Assistance Programme offered with it. After all, staff members suffering from stress, anxiety or depression miss 23.8 days of work over the course of a year, according to Government statistics – and EAPs are designed to tackle these same problems.
What is a Free Cover Limit on Group Life Insurance?
When we arrange a new Group Life Insurance policy, the insurer applies a ‘free cover limit’ with the quote they provide. This free cover limit is the maximum cost that each employee on the scheme is covered for without needing to complete any health questionnaires or underwriting processes.
Free cover limits can be extremely useful for employees with pre-existing medical conditions because they do not have to be disclosed for any amount less than the specified limit.
Remember to check your employee life insurance policies limit at each review as the limit should increase as and when more employees join the scheme.
Is the Employee Life Insurance premium taxable?
SME’s are our bread and butter here at Hooray Health & Protection (because we love working with you!), so most of our clients are pretty new to their market. Of those companies, 90% of the cases we work with involve using a master trust.
Any Group Life Insurance policy needs to be arranged using a trust of some sort to ensure that the compensation is paid out in the most tax-efficient way possible. 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. For this reason, we usually advise our clients to set up a free master trust, where possible, for ease and simplicity.
What are Master Trusts?
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 master trusts are free to use. All you need to do is complete the form, and they will set up everything for you. Once completed, insurers will arrange all claims administration on your behalf.
Currently, specific 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). Fortunately, however, we have started to see certain insurers operate Excepted Master Trusts to bypass and alleviate this issue.
At Hooray Health & Protection, we will always help find the best solution for you. 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.
Frequently asked Questions about Group Life Insurance
99% of the policies we deal with are employer paid schemes but we can help with voluntary Group Life Insurance.
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