Death in Service and Group Life Assurance

You can help to ease the pain by providing Death in Service cover of up to four times gross earnings, at a very reasonable cost. As an example, the family of an employee earning £20,000 would receive a £80,000 lump-sum payment tax free, giving them one less thing to worry about. It is also tax-efficient for the company as the cost will reduce your corporation tax bill.

Setting up a Death in Service policy will mark your company out as a quality employer offering quality benefits. Depending on the level of cover and number of people in the scheme, it may be possible to provide cover without having to provide any medical details.

Income Protection and Permanent Health Insurance

If an employee falls seriously ill or has an accident, it can be costly for a small business or voluntary organisation to continue paying their wages – for anything up to six months – unless you have made provision for such an eventuality.

Employers must pay statutory sick pay for a maximum of 28 weeks, but at £75.40 per week for the 2008/2009 tax year, it is not enough to survive on. However, with an income protection scheme in place you can cover up to 70% of net salary. The best schemes can cover for sickness until your employee returns to work or retirement age. You can also arrange schemes to make payment for a set times scale (i.e 2 years payment).

With the average person 8-9 times more likely to become seriously ill than to die before retirement – and 1 in 3 people likely to have a long-term illness or accident while of working age – this type of insurance could be a crucial business tool. It is also very cost-effective, particularly for younger staff. Employees can take the policy with them from job to job and can procure cover up until retirement age.