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Group Risk
This information is provided as general advice; the needs of each workplace must be taken into account before specific advice can be provided.
Group Insurance provides one or several types of protection insurances to a group of persons (usually grouped by employer, association or membership). Pooling persons together facilitates an economy of scale, where life offices enable a group to access protection insurances at preferred premium rates, and with significantly less administration, than as individuals.
Group Insurances can be offered for Income Protection (often called Group Salary Continuance), Group Life or Group Life & TPD. In some occupations, group cover for specific injury may also be available.
There are many benefits in providing a group protection plan, the two most significant are:
- your employee has valuable protection insurance in place, a significant benefit of being an employee of your business; and
- as an employer you have peace of mind knowing that the financial cost of your goodwill toward your employee, in the event of an unforeseen death or long term illness or disability, is limited.
Other benefits are:
- This cover is not expensive compared to individual cover;
- Whilst not necessarily all the protection insurance your employee will need, it is at least some cover;
- Group plans often facilitate automatic acceptance levels, that is all employees will have access to a minimum level of cover, regardless of their current health or pastime activities; and
- It's easy to administer.
In many cases, group plans are employer sponsored (employer pays the premium on behalf of the employee as a part of their employment benefit scheme). This provides a valuable benefit to your employees, and the premiums, depending on the structure of the plan, may be tax deductible to the business.
