We have many discussions about group life assurance and other group risk benefits.
One thing that comes up time and time again is that people understand how the scheme works but not the mechanics and details behind it. Group Life Assurance scheme pretty much do what it says on the tin. If an employee dies in service then the insurer will pay the benefit to the trustees to pass on to the beneficiaries.
As far as the Group Life insurer is concerned they will look at the risk posed by your scheme. This will be the demographic, benefits, any long term absentees and all material risks associated with you. They will then decide whether to produce terms or not. If terms are produced and are then accepted by the client the scheme goes on risk and claims if be paid in the event of an death.
What the insurers do not do is to make sure that you are compliant with any of the applicable HMRC rules and regulations in regard to setting up a corporate trust deed. Most insurers will require a valid PTSR number for a registered scheme or confirmation that a trust is in place for an excepted scheme.
In our experience we have found that many organisations have not kept up to speed with amendments to their trusts. This are things like adding participating companies, changes of company name and/or address.
Other areas are whether the trust document that you current have is suitable to you requirements.
I have attached a document that we have put together that discusses the different types of trust available, what they are and what a scheme administrator has to be aware of.
James Henson, Director
02476 516 096