Put simply, Group Death in Service is a group life assurance scheme offered by an employer to its employees. It pays out a tax free lump sum to the family of the deceased employee, should they die whilst in service.
Financial Protection
The amount of cover chosen by the employer is usually a multiple of the employee’s salary. Typical examples are 3 or 4 times the employee’s salary but can be higher or lower depending on the employer and the employee’s position within the company.
Employee Benefits
The benefits for the employee are clear. It gives the employee peace of mind and reassurance that the money paid out by the policy will help their family avoid the financial hardship that would arise on their death, had such insurance not been in place. However, Group Death in Service does not solely benefit the employee.
Employer Benefits
There are also tangible and intangible benefits for the employer as well. Firstly, the amount paid in premiums to the scheme is a deductible business expense and will therefore reduce the company’s corporation tax bill. Not only is it a relatively low cost benefit, but a wide variety of features can be added and it can be tailored to the employer’s requirements. It also allows the company to demonstrate its commitment and care to its employees and their families thereby fostering increased employee morale and loyalty.
Contact Abacus Wealth Management today if you think your business could benefit from a Group Death in Service policy.