Why a Company Life Insurance Scheme Can Provide You With Peace of Mind

As an organisation grows it becomes more and more important to provide employees with a reward package above and beyond basic pay and bonus. Employees begin to expect a well rounded employee benefits package which provides them with the peace of mind their lifestyle is protected.

One of the first employee benefits to be considered is company life insurance also known as death in service. This simply provides a lump sum payment should an employee die whilst in service with the company. Unlike personal insurance, an employee life insurance scheme has a level of cover which is structured as a multiple of salary, offering anywhere from as little as 2 x salary to 10 x salary as a lump sum should the worst happen.

As employee benefits go, company life insurance being a well defined product has a very simple structure, an employee dies, and they get a payout. The key considerations are the level of cover you wish to provide employees with and ensuring the policy is set up tax efficiently.

Life insurance is an approved tax exempt employee benefit, meaning neither the premiums are subject to a p11d liability or the benefit when paid out subject to tax so long as it is structured correctly.

A group life insurance scheme can be set up so that  should the worst happen to an employee the lump sum will be paid into the trustee's bank account to be passed on to the employees nominated beneficiaries without becoming part of the deceased's estate and subject to inheritance tax.

A group life insurance scheme can provide peace of mind to both parties, the employee has the peace of mind knowing their family will be supported should the worst happen whilst the organisation knows they have done all they can to support the employees family.

Other employee benefits which are worth considering when creating a well rounded package is company health insurance, group sickness insurance and critical illness cover.