Group Life Insurance

CCW Global is able to assist businesses in Hong Kong, China, and throughout the APAC region in arranging company-provided group life insurance schemes.

Group Life Insurance schemes are generally purchase by companies and offered to employees as part of a business’ Employees Benefit Package; in some cases the employees will be offered the option to take up the insurance and pay for the cover on an individual basis, while other organizations may agree to subsidize the coverage on the employee’s behalf.

Providing life insurance coverage through a company can be an efficient way to ensure long-term worker satisfaction as employees receive peace of mind knowing that their families will be protected in the event of the worker’s untimely demise. Additionally, including a Corporate Life Insurance offering in a business’ Employee Benefits package can be a vital tool for attracting key talent to an organization.

Group Life Insurance Coverage

Group Life Insurance plans offered through a Company, Association, or Non-Profit Organization (such as a sports team or social club) will generally be simple Term Life Insurance policies provided on a yearly-renewable Term.

This means that the premium for the group plan will change each year based on the demographics of the policy; increasing as the average age of the group gets older, and decreasing if the average age of the group gets younger with, for example, the retirement of a senior director or upper management.

As such, if the demographic of the group remains consistent then it can reasonably be expected that the company, or the employees, will pay more for their life insurance protection each year as the average age of the group increases. However, if older workers retire, or if a raft of younger employees take up positions in the organization, then the total premium can actually decrease for that policy year.

In regards to the coverage offered under a group life insurance policy, a covered member of the group (or their beneficiaries) will normally receive a lump sum payment in the event of their death during the course of the policy year. The payment received by the employee will be predetermined and will fall into one of two categories; a Flat Benefit or a Multiplier of Base Annual Salary.

Flat Payment Benefit

In the event of a Flat Benefit, all employees in the company covered under the organization’s life insurance policy will receive the same settlement in the event of death. For example, should any employee die unexpectedly during the course of the policy year, their beneficiaries will receive a standard settlement.

This settlement could be US$ 200,000 or it could be US$ 2,000,000 (with larger benefits costing higher premiums) but all employees will receive exactly the same benefit in the event of death.

Multiplier of Base Annual Salary

The other option for benefit payments under a group life insurance policy is for the settlement to be provided as a multiplier of the deceased individual’s Base Annual Salary (BAS). In this case, if the employee dies during the course of the policy then they will receive X times their Annual salary as a settlement to their beneficiaries.

For example, if a company life insurance scheme offers a 3 Times Multiplier of Base Annual Salary as the policy’s death benefit, and an employee dies with an annual salary of US$ 35,000, then the total death benefit payable to the employee’s beneficiaries under the plan will be US$ 105,000.

In many cases it is possible to select the multiplier benefit, but a larger multiplier will generally mean a larger overall premium.

Employee Classes and Benefits

It is important to note that under a Group Life Insurance plan a company can pre-define different classes of employees to receive different levels of benefits. As with Group Health Insurance, Senior Management can receive a different benefit level from General Employees. However, it is not possible to have individual employees select their preferred benefit limits.

Free Group Life Insurance Consultations

If you have any additional questions relating to Group Life Insurance, or if you would like to enquire about obtaining Group Life Insurance protection for your organization, please Contact CCW Global Today to arrange a free no-risk, no-obligation consultation with an expert corporate insurance specialist.

You can learn more about the services CCW Global offers to corporate clients by clicking About CCW.

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