We can help you sell Group Life
Explaining the key points of our Group Life policy is a simple way to communicate the benefits and the value of your clients putting this cover in place for their employees.
Issues that could affect your clients' decisions
- Our online claims process helps reduce the need for paperwork at a difficult time. With such a streamlined process, we’re also proud of being able to make prompt payments to trustees or beneficiaries – often in as little as two days or sooner, which means that money is available without waiting for probate.
- Under current UK tax laws, premiums are usually treated as an allowable business expense although this may change in the future.
- For a registered scheme, lump sums payable are normally tax-free up to the members Lifetime Allowance (LTA). All combined registered pension benefits above the Lifetime Allowance are subject to an LTA charge.
- For excepted schemes, lump sums are usually tax-free and do not count towards a member’s LTA but must meet certain conditions.
- Our Group Life lump sum benefits, whether registered or excepted, are written under a discretionary trust: which means that under current legislation they are not subject to any income tax and/or inheritance tax.
- Your clients can choose different levels of cover, grouping their employees by benefits to reflect multiples of salary or lump sum limits.
- Trained bereavement counsellors will offer advice and support on practical and emotional issues, not only to beneficiaries, but also to colleagues who have been affected by a loss of life.
- Our free cover limits mean that usually members do not need to complete medical underwriting for this type of policy.
- Cover can be extended to include pension benefits to members’ spouse/civil partners, dependents and/or children.
- Employees who are based overseas can be covered by our Group Life policy providing their contract of employment is with the UK company.
We stay abreast of industry issues, so that we can help you be prepared for conversations with your clients about factors that could affect a decision to buy a policy. In the case of Group Life policies, these facts can help you talk about these considerations:
Changes in the law regarding the Lifetime Allowance (LTA)
Beneficiaries of a small number of employees with high levels of cover may find that benefits are subject to an LTA charge primarily as a result of the LTA being reduced over the last few years. With people working longer potentially, they could accrue more funds and pay more into their pensions – so their lump sum life assurance benefit could trigger a tax charge of up to 55% for the employee’s estate on the amount above their LTA.
HMRC currently states that, to be affected, an individual needs to have saved more than £1 million in money purchase pension schemes, or, be a member of a final salary scheme who is entitled to a pension of either £50,000 pa, or, if a scheme pays out the maximum tax free cash sum, a pension of around £37,500 pa. Please note, tax rules may change in the future.
Many individuals take precautions to protect their estate in these cases – however, it is important to consider how your clients structure any Group Life assurance benefits.
How are we helping?
We can help you and your clients deal with these circumstances. If your clients already have a registered and excepted policy in place, then their combined benefits remain covered. for more information about chnages to the lifetime allownace, see the HMRC's web content
Information about tax is based on our understanding of current legislation. The law relating to tax may change in the future.
Auto-enrolment – an opportunity to address benefits
The industry body Group Risk Development (GRiD) carried out employer research in 2012: it found that 55.9% of employers that do not already offer group risk protection benefits said they would consider implementing a group life scheme once pensions auto-enrolment becomes law.
How are we helping?
With this in mind, we’re encouraging advisers to see these changes in legislation as an ideal opportunity for reviewing benefits in place. We can help you set up a policy that includes life cover in a pension arrangement for your clients. This is an ideal way to secure peace of mind financially, whatever the future holds for your clients’ employees.
What’s needed to set up a Group Life policy?
Before filling in the forms, your client will have to decide whether or not there will be age requirements associated with the scheme – such as a fixed probationary period. However, every employer must comply with the Equality Act 2010. They should therefore think about:
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- The levels of benefits they’d like to offer to employees
- The termination age for the policy
- The eligibility criteria and the category of employees that are to be covered.
Some clients will be uncomfortable discussing plans to cope with deaths in their workforce. However, these are risks that companies could benefit from considering; particularly those that are employing specialist or high-paid senior personnel. We’re here to help you explain the benefits of our Group Life policy, and answer any questions you – or they – may have about all the products in our Group Protection portfolio, and how they can work together.
Call the Group Life sales support team: 0800 145 5684
Monday to Friday, 9.00am - 5.00pm
For policy quotes, please email: firstname.lastname@example.org
Calls to and from Aviva may be monitored and/or recorded.
We can help you submit an application, deal with any queries, and give you information that will help your clients proceed with confidence as they buy a Group Life policy.