Group Life Assurance
Life assurance for the workplace.
Group life assurance policies not surprisingly cover multiple people; and are usually purchased by companies for their staff. They can be cheaper to the company, because a large group of people is more likely to conform to averages of life and death. Equally if you work on an oil rig, expect a higher premium!
Group life assurance isn’t like ordinary life assurance, as it is usually purchased by a company for its employees, and offered as part of a benefits package. If you’re considering offering this benefit, it does of course have positive tax implications for your staff, and is an allowable business expense.
Equally, if you’re an employee being offered group life assurance, it’s essential that if you already have a life policy you understand that you have the option to maintain your existing policy and have both, or lose one. Before doing so you must understand that there may be penalties, and you may miss out on future value if you surrender a whole life policy (there is a flourishing “second-hand” market for some types of policy, so you may be able to sell it on).
In general a group life assurance policy is the icing on the cake of a benefits package which may include critical illness cover (also known as income protection). As an employer, be aware of the difference between group life assurance (which is a benefit to the employee) and key man insurance policies, which are protective schemes for the company in the event of the loss of important staff.
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