Press release 31 January 2023.
GRiD, the industry body for the group risk sector, believes the recent excess deaths data published by the Office of National Statistics demonstrates the need for death-in-service support, otherwise known as group life assurance.
According to ONS, in the week ending 13 January 2023, 17,381 deaths were registered in England and Wales; this was 19.5% above the five-year average1.
While the root cause of these deaths is much debated, the fact remains that the early passing of these individuals could leave many households without a breadwinner or source of income. GRiD wants more employers to consider offering group life assurance to their employees to ensure that in the event of the death of a member of staff, the employer can offer a financial safety net to their family and dependants.
What is death in service / group life assurance?
Death in service is a payment made by an employer to the family of a deceased employee. It is usually paid as a tax-free lump sum and is generally calculated as a multiple of the employee’s annual salary but can also be a taxable pension, or both. The exact amount can vary between employers but a payout of around four times a salary is typical. This substantial sum of money can be used by dependants to continue mortgage payments, pay for the funeral, or cover any other financial commitments.
The latest data from the GRiD 2022 Claims Survey shows that in 2021 the industry paid out 13,479 death claims at an average of £116,414, and Swiss Re Group Watch 2022 highlights that 10.51 million employees are insured for death in service benefits.
Katharine Moxham, spokesperson for GRiD, said: “During COVID, we saw many more people become aware of their own mortality and that of their close family, but as life returns to normal, it’s human nature to think these things won’t happen to us. However, this data is a stark warning that many families are indeed losing loved ones unexpectedly. This heartache can be hugely amplified, especially if the remaining family are not able to cope financially.”
GRiD warns that the product name ‘death in service’ can be misunderstood and that employees may not fully understand that the product simply pays out if the individual is insured and is on the payroll – they do not need to die in the workplace itself to qualify for the benefit.
Death in service is generally of a significantly lower cost than other group risk products. A further benefit to the employer is that premiums can generally be offset against corporation tax.
Katharine Moxham continued: “This is very much a peace-of-mind benefit. The employee will never see the funds but they can benefit by having the reassurance that should something happen to them, their family will not struggle for money in the short term.”
- Ends –
1.
For further information please contact:
Sharon Mason
SMUK Marketing and PR
smason@smuk.org.uk
Mob: 07747 611773
Land: 01252 843350
Katharine Moxham
Spokesperson for GRiD
Katharine.moxham@grouprisk.org.uk
Mob: 07887 512508
Notes for editors
About GRiD
Group Risk Development (GRiD) is the industry body for the group risk sector, promoting the value to UK businesses of providing financial protection for their staff, enhancing their wellbeing and improving employee engagement. Our membership includes insurers, reinsurers, intermediaries and those operating in (or with other interests in) the UK group risk market. Together this forms a collective wealth of experience built over many years. Under the chairmanship of Paul White (head of technical, Howden Employee Benefits & Wellbeing) GRiD aims to promote group risk through a collective voice to Government, policymakers, stakeholders and employers.
GRiD works with government departments and regulators involved in legislation and regulation affecting group risk benefits, and with other organisations involved in the benefits and financial protection arenas. GRiD also seeks to enhance the industry’s standing by encouraging best practice and by participating in industry-wide initiatives such as the professional qualification in group risk managed jointly with the Chartered Insurance Institute.
GRiD’s media activity aims to generate a wider awareness and understanding of group risk products and their benefits for employers and employees.
GRiD’s dedicated spokesperson, Katharine Moxham, provides expert media comment on a full range of group risk issues.
Follow Katharine Moxham on Twitter @KMoxham
