Group Life Insurance

Group life insurance, which is also known as death-in-service benefit, is an attractive bonus that employers can offer to their workers. The policy covers a staff member’s life whilst they are employed by the business and pays out a lump sum to their family if they die.

How does group life insurance work?

If an employee who is covered by the group life insurance policy dies, their loved ones will receive a lump sum that is usually a multiple of the employee’s salary. For instance, it could be two, three or four times their annual salary, which is provided tax-free if it falls within the beneficiary’s lifetime tax-free allowance.

Group life insurance is paid for by the employer. As such, the business decides how much cover the policy will provide and it will usually remain in place until the employee either retires or leaves the company for another reason.

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Who pays for group life insurance?

Taking out Group Life Insurance offers several benefits for both employers and employees, making it a valuable consideration for businesses of all sizes. Here are some key reasons why:
For Employees:

  • Financial security for loved ones: In the event of an employee’s death, the policy provides a lump sum payment to their beneficiaries, helping ease financial burdens during a difficult time.
  • Peace of mind: Knowing their families are financially protected can reduce stress and anxiety for employees, allowing them to focus on their work and well-being.
  • Competitive benefit: Group Life Insurance can be a highly attractive benefit, making your company a more appealing place to work and potentially attracting and retaining top talent.
  • Affordability: Premiums are typically lower than individual policies due to group discounts and employer contributions.

For Employers:

  • Attracts and retains talent: By offering Group Life Insurance, you can demonstrate your commitment to employee well-being and create a more competitive benefits package.
  • Boosts employee morale: Knowing their families are protected can improve employee morale, engagement, and productivity.
  • Tax benefits: Premiums paid for Group Life Insurance are often tax-deductible for employers, offering additional financial advantages.
  • Simple administration: The insurance company handles most administrative tasks, making it a relatively hassle-free process for employers.

 

Information given during the application will form part of the legal relationship between you and the protection provider. If any information is omitted or found to be incorrect it may mean that a claim is not paid, or the policy is amended or cancelled.

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Financial advisory in Worcestershire and Kent

Based in Droitwich Spa, we’ve proudly supported clients of all ages since 2004. The opening of our second office in Sevenoaks allowed us to extend our bespoke financial services even further, making SN Financial a trusted financial adviser for individuals, couples, families and businesses across Worcestershire, Kent and the rest of the UK.

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