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Group Life Insurance

Group Life Insurance allows a large group of individuals within an organisation (typically a group of employees) to purchase Life Insurance at a competitive wholesale premium rate. Effectively functioning as a combined group policy, it offers the advantages of little to no medical underwriting and simple administration.

As well as Life Insurance, this type of policy can also include TPD (Total and Permanent Disability) insurance, and in some cases it can include Income Protection (also known as group salary continuance).

When should I choose Group Life Insurance?

It is the responsibility of every company to offer Group Life Insurance to its employees, as the business is unlikely to have the resources to continue to pay salaries to staff who are absent for long periods of time, due to sickness or injury. This way, as a company owner, you are financially protected from any adverse events that affect your employees’ ability to work.

What are some of the main reasons for choosing Group Life Insurance?

When you provide a Group Life Insurance policy to your employees, you reap the following benefits:

  • Valued protection for your employees and their families, ensuring they can continue to pay living expenses if the worst, such as workplace injury or death, should ever occur.
  • Provides the business with financial protection and extra risk management, shielding you from unforeseen additional sick leave expenses.
  • Removes the need to decide whether to pay a sick or injured employee – if it is covered by the policy, so payment is automatic. You are free of any related financial or ethical dilemmas.

How many members are required and what are the costs?

Generally, minimum Group Life Insurance policy sizes are in the range of 10-200 employees. Special arrangements can sometimes be made for smaller groups.

As the Group Life policies are made available to you at or near wholesale premium price, they are cost-effective and, as a rule of thumb, should cost less than 1% of total payroll. It is always important to weigh this up against the potential cost to the company should the Group Life Insurance safety net not be present.

Premiums are generally tax deductible to the company. Up to 75% of the gross employee salary is covered and, best of all, benefits don’t attract FBT (Fringe Benefits Tax) or GST.

Obtaining Group Insurance quotes

Life and Trauma Insurance are a must-have for any business with several employees. There can be major costs involved, both time-wise and financially, if you choose to insure each employee under a separate policy.

Wealth Smart advisers are able to perform an unbiased comparison of Group Insurance quotes while effectively negotiating costs and terms so that your organisation gets the best possible coverage at the best possible price. This protects both your company’s bottom line and those who are working for you.

Choosing Group Life Insurance

Life Insurance is essential for any business with several employees, especially those that hire workers for high risk roles.  Wealth Smart can compare leading providers and help you effectively negotiate costs and terms so all your employees receive maximum cover at the best possible price, protecting both the rights of your workers and your company.

Page last updated: January 14, 2015