Group Life Insurance

Group Life Insurance is used as a low cost employee benefit.

It provides an employee’s dependants with a tax-free lump sum benefit and/or taxable pension if he or she dies whilst in service. Obviously, when we say ‘in service’, it just means whilst he or she is employed, they don’t actually have to be at work when they die!  The benefit is usually calculated as a multiple of salary (four times is used commonly).

The scheme is an annually renewed contract which, on the anniversary, takes account of leavers, joiners and changes in members’ salaries.

Scheme members still need to be medically underwritten by the Insurer, but there will usually be a ‘free cover limit’ up to which, members will be automatically covered without any underwriting.

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