Company life insurance on Employees is the most common employer sponsored benefit in the UK and often represents the sole life insurance provision for low to middle income individuals. Life insurance for companies provides a benefit on an employees death in service. This can be a lump sum payable to nominated beneficiaries or a taxable pension payable to the employees spouse, civil partner and/or other financial dependents, or both. Company life insurance for employees can be arranged for groups of 5 or more.
Group Life Insurance
A Group Life Insurance policy can be put in place by the trustees of a pension scheme to cover the schemes liabilities for death in service benefits or by an employer to cover a contractual promise outside of a pension scheme to pay a benefit on an employees death in service. Within a flexible benefits package a core benefit of (say) 2 times salary can be put in place with options for an employee to choose a higher or lower multiple.
Most Group Life Insurance policies operate within HM Revenue & Customs’ regulatory framework for a “registered occupational pension scheme” (which includes arrangements set up to provide benefits on death in service only). Generally, premiums paid by an employer can be offset against corporation tax and are not regarded as a benefit in kind. Lump sum death in service benefits can normally be paid tax free up to the Lifetime Allowance introduced under the simplified tax regime for pensions from 6 April 2006.
Company Group Life Insurance Advice and Quotes
Company life insurance on employees advice and group life insurance advice should always be taken when setting up a company life insurance or group life insurance scheme to ensure optimum cover is provided and all tax efficiencies are maximised. For independent financial advice on the options Call Retirement Solutions today for quotes.