Group life insurance, group life insurance broker, uk

06/08/2017

Group Life Insurance, Group Life Insurance Broker, UK

0116 366 6866

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Introducers

What is Group Life Insurance? By Halo Consulting

Group Life Insurance – a bene t for life Group Life Insurance, or ‘death in service’ as it is often known, is one of the most worthwhile bene ts you can o er to your employees. As an employer, it can build trust and make your people feel valued by showing a genuine concern for their welfare. But, most importantly of all, it can help to secure the future of an employee’s family, ensuring a cash lump sum is paid out to support a partner and their children to help them rebuild their lives should the worst thing happen. What’s more, it is cost-e ective – did you know that the cost of Group Life Insurance usually amounts to no more than 0.5% of a person’s salary?

What are the bene ts?

Your employees will receive high quality life insurance, even if they are smokers or have previous health problems. https://halo-consult.co.uk/business-insurance/group-life-insurance/

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Group Life Insurance, Group Life Insurance Broker, UK

There is no tax to pay on the premiums – it is not classed as a ‘bene t in kind’ by HMRC. The cash lump sum is usually tax-free too.

Reduce costs – premiums are considered an ‘allowable business expense’.

Your business will attract and retain people in an increasingly competitive marketplace.

As a business, you will be demonstrating a ‘duty of care’ to your employees.

Group Life Insurance has changed over the years. With the advent of autoenrolment, many businesses now provide Group Life Insurance as a standalone bene t, rather than the policy being part of a company pension scheme.

At Halo Consulting, we will look at the following factors: The number of employees you have The type of industry you work in And the level of bene t required A valued employee is a productive employee – show them you care by giving them the opportunity to help protect their family’s future.

For more information on Group Life Insurance, please call us on 0116 366 6866 or email: info@halo-consult.co.uk

Would I need to cover all my sta with a Group Life plan?

No – however, you would need to include all employees that ful l the entry criteria for the scheme. For example, should the criteria state that “all employees with a minimum of 5 years’ service be included”, then you would need to include all members of sta who have over 5 years’ service.

Would all my sta need to be covered at the same level?

No – you could have di erent categories of cover within the same scheme. For example, if “All Managers” have 5 times their salary level as a bene t, this could be one category, or “All Directors” could have https://halo-consult.co.uk/business-insurance/group-life-insurance/

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7 times their salary level as another category. Usually, a minimum number is required in every category.

What if I have sta based overseas – can they be covered too?

It is worth checking Foreign O ce advice for de nitions of “safe countries”, as some insurers will cover overseas sta , but with some restrictions added.

What level of bene t can we o er on Group Life Insurance?

Bene ts tend to be based on a multiple of the employees’ salary (between 2 and 10 times – this depends on the employer and industry) or as a lump sum, e.g. £500k. There is usually a maximum bene t per employee which di ers between insurers but is typically between £5-£10 million. There may also be a single incidence limit which covers a major incident on the same site or workplace and this is usually speci ed at quote stage.

How tax-e cient are the policy premiums and bene ts?

As the bene t is paid through a trust to the bene ciaries of the employees, it is usually tax-free – there is no P11D bene t chargeable on the employee. Normally, the policy premiums can be o set against corporation tax.

Would our employees need to submit their medical details/evidence?

In comparison to a personal Life plan, the underwriting for a group life policy is simpler. It will depend on several factors including the age pro le and size of the group to be insured. An insurer will provide a “free cover limit” – if an employee’s bene t falls below this level, then no medical evidence is needed. However, if the bene t required is above the free cover limit, the employee would need to complete a medical questionnaire (bene t will be restricted to this level until this is processed). If you want to insure a smaller group of sta , e.g. under 5 people, before any terms are o ered, they may also be asked to complete a medical questionnaire.

https://halo-consult.co.uk/business-insurance/group-life-insurance/

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Group Life Insurance, Group Life Insurance Broker, UK

What does Group Life cover mean?

This is a type of Life insurance scheme that covers a group of people, usually company employees, in a single policy instead of multiple individual policies. The policy premiums can be considerably cheaper than individual rates due to the fact the rates are based on the numbers in the group. This can make Group Life insurance a useful and popular employee bene t for companies.

What would happen if an insured employee dies?

On joining a Group Life scheme, an insured employee would be asked to nominate their bene ciaries. In the event of the employee’s death, the named bene ciaries would receive the tax-free bene t directly.

How would a Group Life scheme bene t an SME?

As a highly-valued, cost-e ective bene t, it can help a company to retain and attract sta in a competitive marketplace. Plus, it demonstrates that a company values their employees, as it is considered a caring and helpful bene t, therefore boosting morale.

What if I want to transfer the Group Life scheme to another provider?

You can do this – however, the new insurer will require the scheme to be underwritten again.

My employees may already have their own Life policy in place – does this matter?

Many people only protect their mortgage and usually do not give much thought to other outgoings, such as bills and debts – this has led to a major shortfall in UK insurance. However, Group Life Insurance is an important addition to any protection portfolio, as nancial support can be provided should the worst happen to an insured employee.

https://halo-consult.co.uk/business-insurance/group-life-insurance/

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Group Life Insurance, Group Life Insurance Broker, UK

Are there di erent levels of cover available?

Many companies tend to cover up to 10 times their annual salary – usually, cover is set as a multiplier of salary or as a xed sum. In some cases, higher levels may be available, especially when dividends or regular overtime need to be considered.

How do we know the amount of cover we need?

The employees’ industry and the market norm for their sector is usually considered, and the company would decide the level of bene t needed.

Would Group Life Insurance be subject to tax?

As policy premiums are not classed as a ‘bene t-in-kind’, thus, no P11D tax is payable.

How would the lump sum bene t be paid out?

The payment would be through an insurer’s Master Trust arrangement – as a result, this is normally tax-free.

What is the length of a Group Life policy?

Usually, up to the employees’ normal retirement age – however, if employees stay working for a company after this age, the insurer may cover them as long as they stay employed.

Would policy payments remain the same?

Usually, payments are set for a period of 2 or 3 years – however, payments would vary if you add a new employee (if they become eligible) or you remove an employee from the scheme, should they leave the company.

https://halo-consult.co.uk/business-insurance/group-life-insurance/

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Group Life Insurance, Group Life Insurance Broker, UK

Would any state bene ts going to the bene ciary be a ected?

The lump sum amount would not be a ected if the bene ciary is receiving state bene ts. Although, if the bene ciary exceeds the capital limit for e.g. housing bene t, this may be a ected, as well as any other means-tested bene ts.

What if my employees want to cover their family on a Group Life policy?

Only company employees can be covered, not family members.

Do we have to place the scheme in trust?

Yes, as a company, you must place the Group Life scheme in trust – this must be registered with HMRC or you could use the insurer’s Master Trust arrangements.

Is there a minimum number of employees required for Group Life insurance?

Usually, a minimum of 5 employees (members) are required to begin a scheme – however, many insurers now o er schemes for less members; the underwriting for smaller numbers is far stricter compared to a larger group of employees.

Will employees who smoke be penalised?

No, as the rates are set on a group basis, smokers are not penalised.

What does the term Registered Group Life Scheme mean?

Most Group Life policies are set up as ‘Registered Group Life Schemes’ i.e. registered with HMRC, either directly or via the insurer.

This means they fall under Pensions Regulations and any lump sum bene ts are aggregated with bene ts from other registered pension schemes, which are then tested against the Lifetime Allowance (LTA).

https://halo-consult.co.uk/business-insurance/group-life-insurance/

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Group Life Insurance, Group Life Insurance Broker, UK

What does the term Lifetime Allowance (LTA) mean?

The Lifetime Allowance is a term indicating the maximum value of bene ts that can be accrued in a pension scheme whilst continuing to bene t from tax relief. The current limit is £1m; any bene t above this amount which was taken as a lump sum would be liable for tax at 55%.

What does the term Excepted Scheme mean?

Suited to high earners with higher amounts of bene t accrued in their pensions, an Excepted Scheme is a Group Life policy written under life insurance legislation. It is not written under pensions legislation, which means the relating bene ts would not be tested against the Lifetime Allowance. However, an Excepted Scheme would be subject to more complex inheritance tax rules that apply to discretionary trusts.

Disclaimer This information does not constitute nancial or any other form of professional advice.

Should you require advice, please contact us directly on 0116 366 6866.

It is important to ensure any insurance policy you take out is suitable for your needs.

Request a callback We need about 10 minutes of your time to really understand what you are looking for and then we can personalise our recommendations.

There’s no obligation and it’s completely free.

https://halo-consult.co.uk/business-insurance/group-life-insurance/

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