Group Life Cover

Group Life Insurance provides a benefit on an employee’s death in service, which can be a lump sum paid to named beneficiaries or a taxable pension payable to the employee’s spouse, civil partner or other dependants.

Defining The Amount Of Cover

The amount of the lump sum and/or taxable pension is usually expressed as a multiple of earnings. By incorporating Group Life Insurance within a flexible benefits package, a ‘core benefit multiple’ can be provided with options for the employee to choose a higher multiple, at their own cost, usually paid via salary sacrifice.

The earnings and benefit multiple is determined by the employer. Providing the level of benefit remains below the ‘free cover level’, no medical evidence is required. Benefit above this level will require a medical questionnaire to be completed and the premium may increase depending on the medical information.

Tax Considerations

Generally, Group Life Insurance policies operate within HM Revenue & Customs' regulatory framework for a registered occupational pension scheme. This enables lump sum death in service benefits to be paid tax-free up to the Lifetime Allowance. It is possible to provide death in service benefits in excess of the Lifetime Allowance through an excepted policy.

For more information about our services or to speak to one of our consultants, simply complete our enquiry form, send us an email or call our Cambridge office on 01223 357131 or our Norwich office on 01603 661156.