Insurance policy: What are some of the silent benefits under group life?
Group life Assurance is an agreement between the policy owner (Employer) and the insurer whereby upon consideration, the insurance company agrees to pay sums of money upon an occurrence of the insured individual’s misfortune such as death, disability or critical ailment. FILE PHOTO | SHUTTERSTOCK
What are some of the unique benefits that can be included under Group life?
Group life Assurance is an agreement between the policy owner (Employer) and the insurer whereby upon consideration, the insurance company agrees to pay sums of money upon an occurrence of the insured individual’s misfortune such as death, disability or critical ailment.
In most cases, employers would take up basic benefits under group life such as death benefits from all causes - illness, accidental or natural causes.
The benefit is payable upon the untimely death of a member while still in employment.
In addition, we all know the financial distress one can endure in the event of a funeral arrangement and as such the last expense or funeral expense benefit within a group life cover also comes in to assist beneficiaries with expenses incurred in the process of giving their loved one a proper send-off.
The benefit is usually payable to the beneficiary of the life assured/employee within 48 hours and the amount will be as agreed by the employer on the contract.
Another silent benefit is the critical illness benefit which is payable at 30 percent of the death benefit but limited to a maximum amount upon first-time diagnosis of the disease.
There are usually nine standard illnesses under the benefit which include; cancer, stroke, kidney failure, heart attack, paraplegia/paralysis, coronary/aorta surgery, blindness, multiple sclerosis, and major organ transplant.
The illnesses are listed on the policy document or contract for ease of reference. This benefit assists members who have been diagnosed to cater for medical bills and other expenses that are quite costly including travelling abroad for treatment. It also ensures they don't deplete their medical cover.
Finally, we have permanent and total disability benefits, whereby an employee is deemed to be disabled due to an accident or ailment and is deemed to be permanently and totally incapable of engaging for income or profit in their own occupation or another occupation, the member will be paid based on the degree of disability as stipulated on the policy document.
Further to the above, there are a wide variety of unique benefits/ riders that can be included in the group life cover to protect both the employer and employee from financial burden in case of an uncertain event or occurrence by giving them peace of mind such as retrenchment cover, profit share, maternity/paternity benefit, hospital cash benefit, parents/parents in law funeral expense benefit and coffin and hearse benefit.
Retrenchment cover
With the economic rate of inflation going up and firms laying off employees, retrenchment cover provides a monthly tax-free payment when staff is retrenched to help them cover ongoing expenses for a while, as they look for a new job for a specified period.
It can also be extended to cover the death of an employee who has been retrenched up to an agreed amount indicated on the policy contract.
Profit share
The insurance company will share profits with the client where the loss ratio is below the benchmark rate of 65 percent. The profit-sharing formula is defined at the commencement date.
The joy of having a newborn comes with a lot of financial implications, the benefit is payable to the member as a lumpsum amount agreed upon on the contract to aid the member to cater for baby stuff expenditures.
Hospital cash benefit
When in a hospital you may be faced with challenges where you cannot access certain services since they are exclusions under your medical cover.
This benefit will be assisting the life assured cater for such expenses should they be admitted to the hospital for a duration not less than three days.
Parents/parents in law funeral expense cover
The funeral expense benefit can be extended to cover parents and parents-in-law of employees. The benefit will ensure a decent and deserved send-off in case of the untimely loss of life. The payment is done within 48 hours.
