Also known as: Group Term Life Insurance
Life cover for employees under a single employer-held policy, at group rates.
Group Term Life provides a lump sum to an employee’s nominee in the event of death during employment. Because the risk is pooled and underwriting simplified, per-employee cost is a fraction of equivalent individual term cover, and medical tests are usually waived up to a free cover limit. For employers it is among the most cost-efficient benefits available; for employees it often represents the only life cover they hold.
Organisations of almost any size. Commonly structured as a multiple of annual salary — two to five times is typical — or as a flat sum across all employees. Particularly valued in sectors where employees are primary earners supporting dependants.
Sum assured is usually a salary multiple or a flat amount per employee. The free cover limit is the key figure: cover up to that level requires no medical underwriting. Above it, individual employees may need medical tests, which slows enrolment and should be factored into scheme design.
The difference between a policy that responds and one that disappoints usually sits in details that are easy to overlook at purchase.
Not sure which combination fits your business?
Speak to an AdviserIt is cheaper, employer-funded, requires little or no underwriting, and ceases when employment ends. Individual cover is portable and continues regardless of employer.
Cover ceases. Some insurers offer conversion to an individual policy, which is worth establishing at placement.
Usually not, up to the free cover limit. Employees whose cover exceeds it may require underwriting.
Yes. Schemes are commonly structured in bands by grade or salary multiple.
Premium paid by the employer is generally a deductible business expense. Death benefit treatment for the nominee should be confirmed with a tax adviser against current provisions.
Group claims are typically settled faster than individual claims, as underwriting has already been completed at scheme level.