Group life insurance pays out a lump sum death benefit to your employees’ family or next of kin should that individual die whilst employed by your organisation.

It is set up as a single scheme that covers a group of employees within a business. Many companies offer group life insurance to employees as “death in service” benefit an doften based the level of cover (sum assured) on a multiple of the employee’s salary.

It is possible to purchase life insurance for each of your employees individually however businesses usually take out a group life insurance scheme to cover all of their employees. Group Life schemes can be set up on a standalone basis or can be linked to your company pension scheme.

Group life insurance is one of the many employee benefits available for employers to offer their staff. Other benefits include pension schemes, group income protection schemes providing a replacement income if an employee is off work long term and group medical insurance plans.

Endsleigh’s team of employee benefits experts can work with you to arrange group life insurance that ensures your employees’ families and loved ones are protected should the worst happen.

What are the benefits?

  • Being a member of your company’s group life insurance scheme will provide financial peace of mind for your employees, safe in the knowledge that their loved ones will be financially secure in the event of their death.

  • The schemes are often far more cost effective than offering individual life insurance policies to employees.

  • An added benefit offered by many insurers is bereavement support at no extra charge, in an attempt to provide additional support at a difficult time.

  • The administrative savings offered on a group basis also make group life insurance an attractive proposition.

How does group life insurance work?

It works in the same manner as a regular life insurance policy by paying out a predetermined sum if the policyholder dies within the term of a policy. This is usually based on a multiple of each employee’s salary – for example 2, 3 or 4x salary. The benefit is tax free provided it is not more than the employee’s available lifetime allowance - £1.5million in 2013.

With death in service benefit the employee must be employed by the organisation still at the time of their death in order for the benefit to pay out. Death in service schemes usually run until the employees normal retirement age. If an employee takes time out from their career or leaves the company for any reason they will no longer be covered.

Group life insurance is one of the many employee benefits available for employers to offer their staff. Other benefits include pension schemes, group income protection schemes providing a replacement income if an employee is off work long term and group medical insurance plans.

Learn more about group life insurance

Read about the benefits and how to set up a policy.

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