PMS Business
Group Life Insurance
Provide a lump-sum benefit for an employee's nominated beneficiaries if the employee dies while covered by the scheme, subject to scheme rules. It is one of the most valued and cost-effective benefits an employer can offer.
What is Group Life Insurance
Group Life Insurance, often called death in service, is a single policy taken out by an employer that covers eligible employees. If a covered employee dies, the scheme pays a lump sum, usually a multiple of their salary.
How a Group Life scheme works
The employer pays the premium for the whole scheme, which is usually reviewed each year. Employees join and leave automatically as they join and leave the company, subject to the scheme's eligibility rules.
Which employees may be covered
You decide the eligibility rules within what the insurer will accept — for example all permanent employees, or employees after a qualifying period. Insurers have minimum scheme sizes and age limits.
How benefits may be calculated
Benefit is usually set as a multiple of salary, such as two or four times, and can differ between categories of employee. The definition of salary — basic pay, or including bonus and commission — is set out in the scheme.
Benefits for employees and their families
A lump sum at a very difficult time, at no direct cost to the employee. Many schemes also include bereavement and wellbeing support, which varies by insurer.
Benefits for employers
A visible benefit that helps attract and keep staff. Under current rules premiums are usually treated as a business expense, subject to your accountant's confirmation.
Scheme trusts and employee nominations
Most schemes are written under a trust so the benefit can be paid outside the employee's estate. Employees can complete a form telling the trustees who they would like to benefit. Trustees take this into account, but whether it is binding depends on the scheme rules.
Medical underwriting and free cover limits
Insurers set a free cover limit: cover up to that amount is normally provided without individual medical questions. Employees above the limit may need to give medical information, and the insurer may limit or decline cover above the free cover limit.
Setting up a Group Life scheme
We need basic employee data — ages, salaries and categories — to obtain quotations. Once you choose a scheme, we help with the trust, the employee communications and the annual renewal.
Potential benefits and important considerations
Benefits
- Valued by employees at a modest cost per head
- One policy covering eligible staff automatically
- Often includes bereavement and wellbeing support
Things to consider
- Free cover limits and underwriting apply; not every employee may be accepted in full
- Premiums are reviewed and can change at renewal
- Eligibility and benefit definitions must be set carefully
How it works
Getting a group life quotation
From employee data to a scheme in place.
- 01
Share your employee data
We collect anonymised ages, salaries and categories and agree the benefit you want.
Requirements agreed - 02
Compare quotations
We obtain quotations and explain free cover limits, extra services and the trust.
A clear recommendation - 03
Launch and renew
We help set up the trust and communicate the scheme, then review it every year.
Scheme live and reviewed annually
Ready to take the first step?
Your initial consultation is without obligation. Speak with an adviser in Croydon or over Zoom.
Group Life Insurance FAQs
Insurers set their own minimums, and some will cover very small groups. We will tell you what is available for your business.
Under current rules a scheme written under a suitable trust usually pays benefits outside the estate, but tax treatment depends on circumstances and may change.
Cover up to the free cover limit is normally automatic for eligible employees, but those above it may need underwriting and the insurer may limit their cover.
Yes. Many schemes set different salary multiples for different categories, such as directors and other staff.
Related PMS Business services
Request a Group Life quotation
Speak to us about your business. Your first conversation is without obligation.
Important information
Cover, eligibility and underwriting vary between insurers and policies.
Trusts and taxation are not regulated by the Financial Conduct Authority.
Tax treatment depends on individual and business circumstances and may change. We do not give tax advice; please speak to your accountant or tax adviser. The Financial Conduct Authority does not regulate tax advice.
Before you proceed we will confirm in writing whether PMS Mortgages advises on and arranges this cover, or introduces you to another firm, and what that firm's role is.