Tax-Free Lump Sum
Employer-Sponsored Group Life Insurance Pays Out Circa £100m in 2020 COVID-19 Related Claims
GRiD - 17th March 2021
Expression of Wish
Group Life policies are normally set up under a discretionary trust, which enables the provider to make a tax-free payment to the family (or chosen beneficiary) of the employee.
Although the scheme's Trustees will determine who receives the lump sum, an employee can complete our unique online Expression of Wish form, which will record their details and help guide the Trustees to distribute the lump sum in accordance with their wishes.
In addition to the lump sum payment, most Group Life insurers provide additional services to help the employee’s family during what is bound to be a difficult period, including Bereavement Counselling and Legal Support to help with issues around Probate.
Group Life Cover forms a fundamental part of many successful employee benefit programmes.
Also known as Death in Service, its purpose is to pay out a tax-free lump sum to the family (or chosen beneficiary) of an employee, in the unfortunate event of their death during their time with the company.
The tax-free lump sum is often based on a multiple of an employee’s salary, typically 2x or 4x, although these multiples can be higher, or a fixed benefit amount can often be negotiated.
From an employer’s perspective, Group Life Cover is a cost-effective benefit and is a tax-deductible business expense.
In most cases, no medical underwriting is required, which makes the application process straightforward.