Yes it is. These plans provide a lump sum benefit for the employee’s family in the event of his/her death, helping to cushion the impact of loss of salary on their dependants.

These types of policies are one of the more affordable ways to add benefits for your employees. You can also take out a policy written in trust which can pay out to both dependants and your business too. Other benefits of this sort of policy include:

• Relief of the moral burden should an employee die whilst in service
• Help attracting and retaining loyal employees
• Tax efficiency – premiums are a trading expense
• Approved benefits, not “benefits in kind”
• Continuous entry for new members
• Generous free cover level minimising underwriting
• Continuation of existing cover without medical evidence

You could choose to cover just one level of employees, Directors for example. Or, you may want to introduce a fixed probationary period for your employees, before they are eligible to receive Group Life cover. You may decide to allow entry to your company’s scheme at scheduled points during the year – monthly or annually – depending on length of service with the business. It’s important to understand the implications of the Equality Act 2010*, which make it illegal to discriminate against employees, job seekers or trainees on grounds of age.

*WCHC not in control of or responsible for content in third party sites

You could group your employees into categories, and then assign different benefit levels to each category. Directors or senior managers, for example, may be covered for a higher claim than other employees. Or you could decide to set a fixed amount for some employees, and then base cover on a multiple of salary for others.

Group Life product offers a lump sum on death in service, which can be a multiple of salary or a fixed sum. Additionally there can be a dependant’s pension on death in service or even a child’s pension.

Contributions into a registered or an excepted scheme are, in most cases, to be treated as a normal business expense. For a registered scheme, lump sums payable on death are normally tax-free unless a member is a particularly high earner or has significant registered benefits elsewhere that take them over the Lifetime Allowance (£1.5 million from 6 April 2012). For excepted schemes, lump sums are usually tax-free.

If your employees need to be medically underwritten, they will either have to complete a medical declaration form or they maybe asked to take part in a telephone interview.