Business life and critical illness
Business Death in Service Group life insurance
This is one of the first employee benefits introduced by an organisation. It provides a lump sum to the employees loved ones in the unfortunate circumstances of the worst happening.
It’s normal to place the “scheme in trust” so that the benefit is available as a tax free lump sum and does not become part of the deceased employee’s estate.
Benefits are usually set at a multiple of salary and there’s usually an upper limit of £500,000.
When setting up a new scheme it’s important to look at various insurers offerings to select the most appropriate policy. Each insurer has slightly different underwriting methods to assess the perceived risk.
Business Critical Illness Insurance
This is an employee benefit that provides employees with a tax-free lump sum after they survive a covered critical illness . The critical illnesses covered will be listed in the policy terms. The most common conditions covered include cancer, heart conditions and strokes.
There is a range of funding options whereby the policy could be fully funded by the employer, fully funded by the employee or shared-funded by both the employer and employee.
The main considerations when taking out a new policy are the level of cover to be offered (usually a multiple of salary), the range of employees included and the range of illnesses listed.