Find the best Group Critical Illness Cover policy with free expert advice

Features:

• Coverage for Employees: Group life insurance provides a lump sum payment to the designated beneficiaries of an employee in the event of their death during the coverage period. The coverage amount is typically based on a multiple of the employee's salary or a fixed amount chosen by the employer.
• Group Coverage: Group life insurance covers a group of employees under a single policy, making it a cost-effective option for businesses. It simplifies the administration process as employees are enrolled automatically without the need for individual underwriting.
• Flexible Coverage Options: Employers can choose different coverage levels based on their budget and the needs of their workforce. They can select a flat benefit amount or a multiple of the employee's salary.
• Optional Add-ons: Some group life insurance policies offer additional options, such as spouse or partner coverage, which provides a benefit to the employee's significant other in the event of their death.

Benefits:

• Financial Protection for Employees' Families: Group life insurance ensures that employees' families receive a financial safety net in the event of the employee's death. The lump sum payment can help cover funeral expenses, mortgage or rent payments, outstanding debts, and ongoing living expenses.
• Employee Retention and Recruitment: Offering group life insurance as an employee benefit can enhance the overall benefits package, making the company more attractive to current and potential employees. It demonstrates the employer's commitment to the well-being of their workforce.
• Peace of Mind: Group life insurance provides peace of mind to employees, knowing that their loved ones will be financially protected if they pass away. This can contribute to a positive work environment and employee satisfaction.
• Tax Efficiency: In the UK, group life insurance policies are usually tax-efficient. The premiums paid by the employer are generally tax-deductible as a business expense, and the benefits received by employees' beneficiaries are usually tax-free, subject to certain conditions.
• Supportive Bereavement Services: Some group life insurance policies provide additional support services for employees and their families, such as bereavement counseling or access to helplines for emotional support during difficult times.

It's important for businesses to carefully consider their specific needs, consult with insurance providers, and review policy terms and conditions to select the most suitable group life insurance coverage for their employees.

Life Cover for Company Directors (known as a Relevant Life Policy) is a way of providing death-in-service benefits on an individual basis no matter how small your business is. They are not classed as a ‘benefit in kind’ so no tax is payable on the premiums. In most cases the benefits can be paid free of inheritance tax provided the benefits are payable through a discretionary trust.

If you’re a company director and you already have life insurance in place to protect your family, you could be paying more tax than you need to.

What are the benefits?

• Although the company pays the premiums, they are not normally assessable to income tax on the employee as a benefit-in-kind. This can be a significant saving, particularly for a higher-rate taxpayer
• Unlike a registered group scheme, the benefit will not form part of the employee’s annual or lifetime pension allowance

What are the advantages of using a discretionary trust?

• There are restrictions as to whom the benefits of a Relevant Life Policy can be paid, but the use of the trust is the most practical way of ensuring these restrictions are met. The beneficiaries who could be included are usually family members and dependents
• Having benefits paid through a trust ensures they cannot be taxed as part of the company’s trading income, nor do they form part of the company’s assets
• The trust is discretionary, allowing trustees to be flexible as to whom they pay benefits. However the employee can advise the trustees of his or her intentions by completing a nomination form. Although this is not legally binding on the trustees, it helps to guide them. The trustees will normally be the directors of the company
• Using a trust also ensures that in most circumstances benefits are paid free of both income tax and inheritance tax
• The maximum cover differs across insurers: for example, Bright Grey offer a figure up to 15 times the employee / director’s remuneration. This can include salary, regular dividends paid in lieu of salary and any benefits in kind

Are there any limits to the cover I have?

• The legislation does have some limits to qualify for the tax concessions, and to ensure these are met, it requires that:
• The cover must be paid in a single lump sum before the age of 75
• Only Death & Terminal Illness benefits can be provided
• Benefits must be paid through a discretionary trust
• Beneficiaries are normally restricted to family members and dependents
• The maximum amount of cover allowable can depend on your remuneration and age

Who are relevant life policies suitable for?

• Company Directors that would like their company to pay for their life cover and offset the premiums against corporation tax
• Small businesses that do not have enough eligible employees to warrant a group life scheme
• Directors of small limited companies that may be thinking of putting Key Person cover in place so that their company can pay the premiums on their cover
• High-earning employees or directors who have substantial pension funds and do not want their benefits to form part of their lifetime allowance

They are not suitable for the self-employed or equity partners, although their employed staff could be covered.