06 May Group life cover – protecting the people behind your business
GROUP LIFE COVER
protecting the people behind your business
Group life cover is a sought-after employee benefit, but is it the right choice for your business?
This month, the team at HWIFM is thinking about the power of protection.
While protecting ourselves and our family is an obvious priority, businesses can also offer protection to their employees through policies like group life cover.
What is group life cover?
Group life cover is an insurance policy you take out on behalf of your employees.
It functions much like individual life insurance, in that payments are made to an insurance provider to cover a policyholder in the event of their death with a lump sum paid out to their family.
With group life cover, payments are made by an employer so that their employees can enjoy peace of mind knowing that in the event of their death, their family would be financially supported.
Employers can decide to offer this cover as a benefit to their staff. It’s the most commonly used benefit amongst employers across the UK, covering over 9.5 million people.
What are the benefits of group life cover for employers?
While the appeal for employees covered by the policy is fairly obvious, what about the person footing the bill?
The most significant benefit to employers is the effect it can have on staff retention and recruitment. Offering group life cover enhances your overall benefits package, which can help in retaining valuable staff and appealing to prospective employees.
There is data that backs up these claims. A study conducted by Drewberry Insurance found that 29 per cent of their survey participants wanted employers to offer life insurance, while only 13.7 per cent said their employers currently provide it.
For businesses who are competing for highly qualified or niche staff, offering such benefits could be helpful.
How much does group life cover cost?
Understandably, cost is a big consideration for business owners when it comes to group life cover.
Depending on which policy and provider you choose, staff won’t contribute to the premium at all. However, some policies allow you to offer greater cover to staff who choose to pay additional costs towards premiums.
A nice bonus is that premiums for life cover do typically qualify as an allowable business expense. But how much does it actually cost?
As an employer, you pay a premium that is calculated depending on the kind of policy you’d like to offer, among other factors.
While the Swiss Re Group Watch reported in 2016 that the yearly average cost is £115 per employee, the actual cost to you depends on a variety of factors, including:
- Your employees’ salaries
- Whether you’d like to provide varying cover for employees at different levels
- The number of employees you have
- The ages of your employees
- Which industry you are in.
Do I need to take out group life cover for my staff?
There is no right or wrong answer to this question; it very much depends on your unique circumstances as an employer.
However, for those who do choose to invest in a new policy, April is a good month to do so with HWIFM. For every protective policy scheme taken out by our clients in April, HWIFM will donate £100 to Winston’s Wish – an incredible charity that supports children after the death of a parent or sibling.
The team at HWIFM want to give you the opportunity to ask the question and discover the right answer for you. Because protection is only the best choice when it’s best for you.
Please call our team on 01606 338914 or email firstname.lastname@example.org