Policies with a fixed cease date expose employers to uninsured liability.
Employers are in danger of having group risk protection policies that are not legislatively compliant because of increases in the state pension age.
Group Risk Development (GRiD), the group risk trade body, said following the removal of the default retirement age (DRA), group risk benefits can legally cease at age 65 or the state pension age (SPA), whichever is later.
Although the SPA has already increased to 66, 67 or 68 for many people, GRiD members are still seeing policies where employers have kept a fixed cease age of 65, or even 60, rather than re-defining the cease date as “65 or SPA, if later”.
This exposes them to uninsured liability for benefits that arise after that fixed age for people who reach 65 or SPA beyond that.
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