intro to group life assurance.pdf
Protection
Care
Group Life Insurance
Support for families when they need it most
Take care of your people
Our Group Life Insurance protects your employees’ loved ones if an employee dies while working for you. It’s a valued and affordable workplace benefit that shows your employees you care.
What is Group Life Insurance?
Our Group Life Insurance provides an employee’s family with a tax-free payment if they die while working for you. It’s a simple and affordable workplace benefit that shows your employees you care. As an employer, you decide who to cover and the amount of cover available.
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Key benefits
- A tax-deductible business expense
- No medical underwriting in most cases
- Valued employee benefit that helps retain and attract employees
Key features
- Life insurance for two or more employees
- Choice of cover options, either in fixed amounts or multiples of salary
- Cover groups of employees for different benefits
- Employee’s family receives a tax-free payment
- Easy to set up with simple yearly accounts
- Bereavement counselling for employee’s family and colleagues
- Legal support to help employee’s family with any probate issues
- Policies are set up under a discretionary trust, with a Master Trust available for online policies
How does it work?
Step one
You set up a discretionary trust in order to take out a policy with us.
Step two
You choose who you want to cover, the amount of cover and how employees join the policy. Once you’ve accepted our quote, we’ll set up your policy.
Step three
We’ll produce your accounts and invoice once a year using the employee data you send to us. You can pay monthly or annually.
Step four
If an employee dies, you should make a claim. We’ll review the claim and if it’s accepted, we’ll make a payment to your discretionary trust.
Step five
The trustees will then pay the claim to the beneficiaries – normally the employee’s family or dependants.
Our cover
As an employer, you can choose who you want to cover in your policy.
You might choose to include all permanent employees aged between 16 and 75. You also choose the level of cover available, which can be a fixed amount or multiple of the employee’s salary.
Cover options
| Benefit options | Multiple of salary |
|---|---|
| You can choose to cover your employees by a multiple of their salary - up to 10 times their salary. For example, if you chose to cover an employee earning £25,000 by a multiple of four, their total benefit would be £100,000. | |
| Benefit options | Fixed benefits |
| You can set a fixed amount for all employees, regardless of their salary. For example, all of your employees could receive a fixed benefit of £100,000. You can also choose to cover different groups for different benefits. For example, you might want to cover directors for a different amount than the rest of your employees. |
Trust options
Our Group Life Insurance policies are designed to work with discretionary trusts.
There’s a number of ways to set up a discretionary trust and we provide a range of template deeds to help you get started.
Setting up a discretionary trust
A discretionary trust lets you put money aside for specific beneficiaries. The trust is managed at the trustees’ discretion – they will follow the trust ‘rules,’ which states how and when the beneficiaries will receive the trust income. For Group Life Insurance, the trust income will be the claim payments as and when they’re paid into the trust.
Please note
You should always seek legal advice about which trust is right for your organisation.
- Your organisation or people in your organisation
- Named individuals
Who can act as the trustees?
If you use a discretionary trust, the trustees could be:
- An independent third party
Joining our Master Trust
As an employer, you can set up your own trust or use our pre-arranged Master Trust, available through our online platform CLASS. By joining the Master Trust, you’ll provide valued life benefits for your employees without the extra work of administering a scheme.
Support services
We believe protection should be more than a financial benefit. That’s why we offer a wide range of support services with our cover.
These services help support your business and employees, while improving your employee benefits package.
Our Group Life Insurance policies include:
Bereavement Counselling
Losing someone close can be devastating – no one should go through it alone. Our bereavement counselling service gives people time and space to talk about their feelings. It provides access to a dedicated helpline and up to four telephone sessions with a qualified counsellor.*
Who can use it?
- All employees covered under a group life insurance policy
It’s free to use for:
- Immediate family members of the employee
Probate Helpline
When someone dies, you might be in charge of sorting out their estate – their property, money and possessions. It can be confusing, especially if you’ve never done it before. Our probate helpline puts your employees in touch with the experts who can give advice and financial guidance.
Who can use it?
It’s free to use for:
- All employees covered under a group life insurance policy
- Immediate family members
Included with our cover at no extra cost. Find out more about our support services on our website.
- Adults (18+) receive, based on clinical assessment, up to 4 structured telephone sessions. Children (under the age of 18) are eligible for a 90-minute session.
Included with our cover at no extra cost. Find out more about our support services on our website.
These services are non-contractual benefits provided through Canada Life and can be altered or withdrawn at any time.
Key terms explained
Medical underwriting
Medical underwriting involves us assessing the health and lifestyle of an employee to check if we can provide cover. A member usually completes a health declaration form as part of this process.
Eligibility
The eligibility is the group (or groups) of employees you decide to cover. For example, ‘all permanent employees aged between 16 and 70’. Employees who join your company and meet the eligibility will automatically be covered without any requirements.
Discretionary entrant
A discretionary entrant is an employee who joins outside of the policy’s eligibility or normal joining times. For example, an employee is over the policy’s maximum age, but you would like to cover them. This type of cover always needs our agreement and is normally subject to checks, such as medical underwriting.
Free cover level
The free cover level is the total amount we will cover without the need for medical underwriting. The free cover level applies to normal entrants only (i.e., those joining in line with the agreed eligibility and joining conditions) and not discretionary entrants. You can find your free cover level on your quote.
Cease age
The age cover ends for your employees.
Benefit
The amount of money an employee is covered for.
Trustees
The trustees are appointed by you and can be a group of people, or a company, including your own. They are responsible for administering the policy, identifying the beneficiary for a claim and making payment to the beneficiary when a claim is paid.
Also worth knowing
How much does it cost?
Group Life Insurance can cost as little as 1% of your company’s salary costs. It’s an affordable employee benefit and is deductible as a business expense.
How do I get a quote?
You can get a quote from an adviser. Once you’ve discussed your business needs with them, they can email us to get a quote at groupquotes@canadalife.co.uk
What do I need to get a quote?
To get a quote we’ll need the following information:
- Employer details
- The benefits you want to include
- What age the cover should end
- Cover details for individual employees (eg, gender, date of birth, salary, occupation, work location, business travel)
We might need more information if another provider already covers the benefits. Please send your quote request to groupquotes@canadalife.co.uk
Why do I need a trust?
Group Life Insurance policies must be written under a discretionary trust. You’ll also need a trust so we can make a tax-free payment to the employee’s family and dependants.
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When will you need medical information?
Although most employees won’t need to provide any medical information, we might need it in some cases. Some examples include:
- When an employee has a particularly high level of cover
- You ask to cover an individual employee for a higher benefit or maximum age
- There’s been an increase in cover for a small number of employees
This isn’t a comprehensive list and there may be other situations where we ask for medical information.
About us
We provide support when it’s needed most
We are Canada Life, the UK’s largest provider of workplace protection. We have over 45 years’ experience covering thousands of businesses throughout the UK.
Our mission is to help people when they need it most, so we specialise in three products that help employers do exactly that: Life Insurance, Income Protection, and Critical Illness cover.
We’ve grown considerably since we first arrived in the UK in 1903. We now support over 26,000 employers, covering 2.9 million employees for over £310 billion of benefits. This makes us the largest provider of group insurance in the UK.