Paul Avis of Canada Life Group Insurance explores how life assurance is more than a commoditised, price-led product.
On the surface, group life assurance (GLA) is a commodity, paying out a lump sum or death in service pension if an employee dies. At Canada Life Group Insurance we believe that there is much more to this product than just the financial benefit and we have a range of additional services to support employers and employees.
GLA is set up differently to other group risk products. The scheme is established using a trust deed to provide the legal framework, with a set of rules detailing the benefits that will be provided to members. Trustees, appointed by the trust deed, run the scheme. So, for a new stand-alone group life scheme – one separate to a pension scheme – the first area we support is setting up the scheme. Draft trust documentation on our website can be used to establish your scheme, although we always recommend seeking legal advice to ensure the documentation is suitable for you.
The second step is registering your scheme online with HM Revenue & Customs (HMRC). Although we cannot do this for you, we provide some tools that you can use with HMRC’s guide. Schemes registered with HMRC provide significant tax advantages; the premiums are treated as a business expense and are offset against corporation tax and for employees, or more importantly their beneficiaries, benefits are not subject to inheritance tax. When you consider that a person’s house could exceed the nil rate inheritance tax threshold, this can be valuable.
The final step is to arrange your cover. We pride ourselves on delivering great service as the market leader of group life provision in the UK[1], ensuring our claims are paid quickly. Rated in 2014 by a survey of group risk advisers[2] as the best insurer for claims management, and for service for the sixth consecutive year, you can be confident that the payment of benefits is in good hands. Where we have all the paperwork completed, e.g. details of the trustee bank account, the death certificate and employee’s salary, we aim to pay claims within 72 hours.
Employees are not overlooked in our approach, and we seek to take some of the emotional burden away from the workplace. We understand that bereavement can have an awful impact on colleagues as well as family members. We offer a 24/7 bereavement helpline for the deceased’s family, which features up to four face-to-face, local counselling sessions. Details of self-help groups and charities are also provided to help those affected cope with the bereavement. Supporting this is a telephone helpline, which can help deal with all aspects of obtaining probate[3]. The insured employee can also use these services if they suffer a bereavement. In this way, an employer can provide support both practically and emotionally to their staff.
Our “Employer Welcome Pack” contains valuable information about the services, including contact details and employee communications available from Canada Life. We also offer a variety of supporting employer and employee material through our website covering these additional benefits. These are available in a range of media, including videos and PDFs.
There are many pitfalls to setting up a GLA scheme and we are here to help you get it right from the outset. So, when considering where to place your scheme, please think about the services that an insurer has and what is available. We are proud of the level of support we provide for employers and employees, adding greater value to an insured financial benefit.
