What is Group Life Assurance Cover?
Group Life Cover is life assurance provided by a company for its employees (i.e. the premiums are paid by the employer to cover the employees).
It provides a lump sum (and, sometimes, a dependant’s pension benefit) on the death of a member of a scheme.
How does Group Life Assurance work?
On the death of a scheme member a lump sum is paid to trustees. The trustees pass this along to the member’s estate. There is a maximum amount that can be paid tax free. If selected, an annual dependent’s pension is also paid and taxed as income. The amount is specified at the outset (e.g. a fixed amount or a multiple of salary) and the premiums are paid by the employer.
This is a way for an employer of providing financial security to the family of an employee in the event of that employee’s death during service. This provides important peace of mind to employees. Legally, the benefit is usually provided via a company’s pension plan.
Why would an employer set up a Group Life Assurance Cover for their employees?
- An employer can write off the full cost of providing the benefits against corporation tax.
- It is an attractive benefit that the employer can offer current and future employees.
- The underwriting requirements for group life assurance are much less stringent than for individual life assurance cover. A non-medical limit is set based on the size of the group and the levels of cover. Any member whose benefits are below this limit does not need to be medically underwritten, which means that no further medical assessment is required. Irish Life’s non-medical limits are very competitive with a maximum of €1.8m.
- As cover is organised on a group basis, costs are significantly lower than equivalent individual life assurance cover.
- Administration for the employer (and broker) is much more straightforward than purchasing equivalent life assurance cover policies for each individual employee.
What do we need to provide a quote?
- All we need is a list of the employees’ dates of birth, gender and salaries, along with the level of benefit the employer wants to provide. Some background on the member’s occupation is also useful.
- We do not need the company or employee names.
- We will issue you with a quote confirming the number of members, benefit structure, sum assured, non-medical limit and premium cost of the policy.
How do you set up a Group Life Assurance scheme?
It’s easy – once you are happy with the quote, we send you an Employer Proposal form and an explanatory booklet. If members are over the non-medical limit, we may need individual proposal forms to be completed by these members. You return the completed Employer Proposal form to us together with:
- A full list of the members to be covered
- Their dates of birth
- Salaries and gender
- A letter confirming that Irish Life Corporate Business are to commence life assurance cover on a certain date
- Payment on account
For Further information please call Stuart directly on 0872447775.