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Group Life Insurance – Six reasons why it’s great for your people

Many employers offer group life insurance as part of their employee benefits package. It provides a valuable financial safety net to employees and their families in the event of the employee’s death. Here are some business benefits of providing group life insurance:

Employee Attraction and Retention

Helps attract and retain employees, demonstrating that the company cares about its employees’ wellbeing and provides them with financial protection for their loved ones.

Cost-Effective Coverage

Group life insurance is typically more cost-effective than individual life insurance policies. Businesses can negotiate better rates with insurance providers due to the larger pool of insured individuals. This makes it an affordable option for employers to offer valuable benefits to their employees.

Tax Efficiency

Premiums on group life insurance are usually tax-deductible for companies in the UK. This helps reduce the overall cost of providing the benefit, making it more financially feasible for businesses. The benefits are usually written in trust, which in most cases, the benefits payable fall outside of the deceased estate.

Group life insurance trusts and deceased estates are two separate concepts, but they can be interconnected in certain circumstances. Here’s an overview of each:

  • Group Life Insurance Trusts are established by employers to hold and administer the group life insurance policies they provide to their employees. The trust acts as the policyholder, and the employees are the insured individuals. By using a trust structure, employers can ensure the efficient management and distribution of insurance benefits. The trust is responsible for collecting and distributing the insurance proceeds in the event of an employee’s death. It ensures that the benefits are paid out to the designated beneficiaries according to the terms of the policy. Setting up a trust can provide added protection, transparency, and legal structure to the group life insurance program. 
  • A deceased estate refers to the assets, liabilities, and legal obligations left behind by a deceased individual. When a person passes away, their estate is subject to distribution according to their will or the laws of intestacy if there is no will. The estate includes various assets, such as property, bank accounts, investments, and life insurance policies. If an individual has a group life insurance policy through their employer, the insurance proceeds would typically form part of their estate. The proceeds are distributed to the beneficiaries designated in the policy or according to the deceased person’s will. It’s important for individuals to review and update their beneficiary designations regularly to ensure that their insurance proceeds go to the intended recipients and align with their estate planning goals.

Increased Employee Morale and Productivity

Knowing that they have life insurance coverage can give employees peace of mind and enhance their overall wellbeing. It can lead to increased job satisfaction, loyalty, and productivity, as employees feel valued and supported by their employer. In the unfortunate event of an employee’s death, group life insurance provides financial support to their dependents. This assistance can help alleviate some of the financial burdens faced by the family.

Flexibility and Customisation

Group life insurance policies can be tailored to meet the specific needs of the company and its employees. Employers can choose coverage levels, eligibility criteria, and other policy parameters based on their workforce requirements.

Additional Employee Benefits

Group life insurance is often bundled with other benefits, such as company private medical insurance and group income protection, providing a comprehensive employee benefits package. This can further enhance the attractiveness of the company’s offerings to potential employees. 

It’s important to note that specific details and advantages may vary depending on the insurance provider and the terms of the policy. Companies should consult with insurance professionals and consider their employees’ needs when selecting a group life insurance plan.

For more information and advice on employee health & wellbeing, please reach out to Steve Hope via 07920 840 741or email