Group Life Insurance
Group Life Cover (Death in Service) provides a ‘tax-free’ lump sum to the loved ones of an employee who has died whilst being employed.
Typical benefit is a multiple (frequently 3x) of the employee’s annual salary.
It’s a very simple benefit to provide to staff and is one of the highest valued ‘perks’ that an employee can have and yet its largely inexpensive to provide by the employer.
Death in Service is not a taxable benefit and all employees would be included in the cover.
Benefits for Employers
- Improved Staff Welfare: Demonstrates the company's concern with the wellbeing of its employees.
- Allowable Business Expense: Premiums can be offset against corporation tax with no other additional tax to pay.
- Flexible Plans: Different salary multiples can be used for the different staff categories included on the scheme.
- Staff Retention and Recruitment: In an ever more competitive employment market, this is an attractive cost effect benefit to offer employees.
Benefits for Employees
- Provides peace of mind to employees that their loved ones will be financially looked after should anything happen to them.
- Company Paid Premiums: Not liable for benefit in kind taxation.
- Tax Free Benefits: The lump sum benefit is not liable to income tax however pension benefits will be subject to tax.
- Free Cover Limit: The employee will be guaranteed a minimum benefit regardless of their medical history.
Frequently Asked Questions
Do employees have to complete complicated medical questions?
All employees have cover up to a substantial Free Cover Limit and it's usually only 1 or 2 employees who need a medical.
Should the premiums for Group Life be listed on a P11d benefit form?
No, Group Life is not classed as a benefit in kind.