LIFE INSURANCE POLICIES FOR GROUPS

It is the responsibility of every company to offer life insurance for employee groups, as the business is unlikely to have the resources to continue to pay salaries to staff who are absent for long periods of time, due to sickness or injury. This way, as a company owner, you are financially protected from any adverse events that affect your employees' ability to work.

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GROUP LIFE INSURANCE

Group cover for life insurance allows a large group of individuals within an organisation (typically a group of employees) to purchase Life Insurance at a competitive wholesale premium rate. Effectively functioning as a combined group policy, it offers the advantages of little to no medical underwriting and simple administration. As well as Life Insurance, this type of policy can also include TPD (Total and Permanent Disability) insurance, and in some cases, it can include Income Protection (also known as group salary continuance).

WHEN SHOULD I CHOOSE LIFE INSURANCE COVER?

It is the responsibility of every company to offer life insurance to its employees, as the business is unlikely to have the resources to continue to pay salaries to staff who are absent for long periods of time, due to sickness or injury. This way, as a company owner, you are financially protected from any adverse events that affect your employees’ ability to work.

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Choose your own policy, which can be trauma insurance (recovery insurance), life insurance, income protection insurance, or one of the other types of life insurance.

Call our experts to ask any questions you have about the policies.

Life insurance explained by a financial adviser will give you all the information you need to make wise choices.

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WHAT ARE SOME OF THE MAIN REASONS FOR CHOOSING GROUP INSURANCE COVER?

When you provide group cover to your employees, you reap the following benefits:

Valued protection for your employees and their families, ensuring they can continue to pay living expenses if the worst, such as workplace injury or death, should ever occur.
Provides the business with financial protection and extra risk management, shielding you from unforeseen additional sick leave expenses.
Removes the need to decide whether to pay a sick or injured employee – if it is covered by the policy, so payment is automatic. You are free of any related financial or ethical dilemmas.

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HOW MANY MEMBERS ARE REQUIRED AND WHAT ARE THE COSTS OF LIFE COVER?

Generally, minimum life insurance policy sizes require a minimum of 10 to 200 employees. Special arrangements can sometimes be made for smaller groups.

As the group life policies are made available to you at or near wholesale premium price. This wholesale price makes life insurance premiums cost-effective and, as a rule of thumb, should cost less than 1% of the total payroll.

It is always important to weigh this up against the potential cost to the company should the group insurance financial safety net not be present.

Premiums are generally tax-deductible to the company. Up to 75% of the gross employee salary is covered and, best of all, benefits don’t attract FBT (Fringe Benefits Tax) or GST.

When you consult a life insurer, they will walk you through the ins and outs of the best life insurance policy available for your personal circumstances. As part of the strategy to help prepare you for the future, they will also help you to calculate the life insurance cost.

OBTAINING GROUP INSURANCE QUOTES

Life and trauma insurance are a must-have for any business with several employees. There can be major costs involved, both time-wise and financially, if you choose to insure each employee under a separate policy.

Wealth Smart advisers are able to perform an unbiased comparison of Group Insurance quotes while effectively negotiating costs and terms so that your organisation gets the best possible coverage at the best possible price. This protects both your company’s bottom line and those who are working for you.

CHOOSING LIFE INSURANCE FOR GROUPS

Life insurance is essential for any business with several employees, especially those that hire workers for high-risk roles.

Wealth Smart can compare leading providers and help you effectively negotiate costs and terms so all your employees receive maximum cover at the best possible price, protecting both the rights of your workers and your company.

EXCLUSIONS

Any insurance policy will contain a list of inclusions and exclusions. Life insurance is no different. For example, your family won’t receive any death benefit from a life insurance policy if the life insured commits suicide. Likewise, death cover will exclude a claim for a self-inflicted injury. Life insurers will also explain exclusions resulting from acts of war or criminality.

CLAIMS

A life insurer will always check that a claim falls within the parameters of the life insurance cover. All requirements of the life insurance must be met before a claim pays a lump sum.

If the life insured has not stipulated a beneficiary on their life insurance, waiting periods will also increase while the trustee ensures that the policy terms have been met and nominates a beneficiary.

Claims may also be subject to waiting periods while a trustee determines if a critical illness, terminal illness, or death occurred while the policy was active.

Similarly, permanent disability claims and a serious medical condition will also be subject to intense scrutiny by a health insurance trustee.

Part of what you can expect when submitting a claim, includes:

A potential waiting period of up to three months while medical examinations take place by independent doctors indicated by the relevant life insurance company
Alternative employment potential assessments

Only once all policy terms have been met, can you expect a lump sum payment or monthly benefits, depending on the policy type.

OTHER TYPES OF LIFE INSURANCE

It is always advisable to speak to experienced life insurers about other types of life insurance. You may want to know more about life insurance policies or term life insurance to boost your strategy of preparing for the future.

For example, you may already have life insurance policies through groups but want to supplement these with income protection insurance, or term life insurance. In this case, life insurers can analyze your existing insurance portfolio and provide the necessary advice.

MEDICAL HISTORY

This advice may require you or them to compare life insurance quotes. It may mean that you will have to provide the insurance provider with your medical history.

A medical history will confirm whether you have pre-existing medical conditions. It will also determine whether you suffer from a serious condition or a terminal illness. If this is the case, a life insurer may refuse a life insurance policy or load the life insurance premium.

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Call Wealth Smart to chat about your life insurance coverage requirements today. Our financial advisers are standing by to get your the best life insurance tax deductible cover possible.

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