The Benefits of Group Life Insurance

business meeting for budgets and disaster recovery options 

The death or disability of an employee can have a life-changing impact on staff and families, no matter their age or role within the business. As an employer, you have the chance to offer certain employee benefits that can help to mitigate some of the risks that come with employing people. Unfortunately, death in service does happen but there are ways you can help to ease any financial strain this may have on your business and the families of your staff.


Group life insurance is an ideal solution for businesses looking for a way to protect their staff. The group risk industry paid out £483m in annual income protection benefits to a total of 15,244 people during 2019.


So, how does it work and what benefits can it bring?


How does group life insurance work?


Group life insurance is taken out by the employer on its employees. The employer is the policyholder and they pay the premiums. If a member of staff was to die while employed by the business, group life insurance pays out a lump sum which often goes to the family or next of kin.


At Caspian Insurance, we can help you find the right kind of cover, including helping you to decide on the benefit structure, suitability of the policy and who or what is covered.


What are the benefits to the employer?


Taking out group life insurance has a number of benefits that can help the business as well as its staff. By offering group life insurance as part of a benefits package, it can help the business to recruit and retain staff. This can be invaluable in finding talent for the business, as many staff look for attractive benefits when applying for jobs.


Offering group life insurance can reinforce the values and culture of the business, letting employees know that the business is a caring one that puts their wellbeing first. Furthermore, the business is able to provide a financial lifeline for the employees, which can boost morale and staff satisfaction within the business.


A group income protection policy will often include extra support services, designed to help employers and employees alike, even if a claim is never made. In 2018, 3,551 people were helped back to work before they even reached the point of making a claim.


What are the benefits to the employees?


Above all else, for employees and their families, group life insurance provides peace of mind. It can give employees access to financial protection that they may not have been able to afford or access otherwise.


Depending on the type of group life insurance cover, it can also include long-term sick pay or critical illness benefits as well as death in service benefits. Included as part of the contact of employment, it can provide some security for staff that their health and wellbeing has been considered by the business. The average new claim paid in 2018 was £26,322 pa, with the main causes for claim including cancer and mental illness.


For instance, if an employee passes away in service, the pay-out can provide essential financial support for family left behind. Similarly, if an employee is diagnosed with a critical illness, group life insurance cover can provide regular payments.


Death and illness can be very unexpected. With a group life insurance policy in place, both the business and its employees can face the financial challenge that may come with losing a member of staff.


Please note the above does not constitute as financial advice.


If you would like to know more about setting up group life insurance, get in touch with the team today.



Stats taken from GRiD 2019 Claims Survey