Group Life insurance is a benefit offered by an employer or an aggregator of diverse segments of the population for reasons other than insurance (like an association or labor organization) to its workers or members. Such organizations are called the sponsor of the group life scheme. Group life insurance is typically offered as part of employee / membership benefit package.
Ideally the cover will cost each individual worker or member much less than if they had to purchase an individual policy. Those receiving coverage do not have to pay anything "out of pocket" for the Group Life policy benefits if the employer or the group to which they belong provides this as a benefit. However, members of the group or employees may pay directly through salary or annual subscriptions if the employer or the group plays the role of a facilitator only. Usually a minimum number of employees or members are prescribed for the team to qualify as a group for the purpose of taking a group life cover.
What is covered under the Group life policy have?
This benefit is payable on death from illness (natural causes) or accidental. The amount payable, called the sum assured, is either a fixed sum for all members in a particular category as predetermined by the sponsor or is determined as a multiple of the annual salary as set by the sponsor. The benefit is normally paid out as a lump sum to either the sponsor or the designated beneficiaries of the deceased employee / member.
This is normally taken as an additional benefit to help facilitate the disposal of the mortal remains of the deceased member. The benefit amount ranges between Kshs. 30,000 and Kshs. 200,000/- either as a separate cover or as acceleration (advance payment) of part of the full death benefit described above. Customarily, this benefit is paid within 48hours of receipt of written notification of the death.
Credit Life Assurance& Sacco loan protection:
Group life plans are also used to provide cover to redeem the outstanding loan balances in the event of premature death or disability of the borrower. This cover can be renewed every year (annually renewable) or provided at the onset of the loan agreement for the entire term of the loan (single premium option). All lenders with a minimum of 10 borrowers including financial institutions and Sacco’s qualify for this cover.
Group life schemes offer mortgage protection arranged on a yearly renewable or single premium basis for lenders to specifically protect the families of the deceased mortgagor from the risk of the lender reselling their home in the event of the untimely death or disability of the breadwinner. This cover provides the same benefit as for credit life.
What are the age limits for the Group Life Assured plan?
The minimum age at entry is 18 years while the maximum age at entry is 65. Beyond the age of 70 years, renewal for the respective member is reviewed individually.
What are riders and why should I take them?
Riders are benefits that complement your plan and offer additional benefits at a relatively low cost. The riders include:
Total and Permanent Disability:Where an amount equal to the death benefit sum assured will be paid to you in the event that you become permanently and totally disabled as a result of illness or accident.
If a member contracts a specified critical illness for the time (the first diagnosis). The specified illnesses are cancer, kidney failure, Paraplegia, heart attack for the first time in their life, Stroke, Coronary artery bypass surgery and major organ transplant. 30% of the accepted group life sum assured subject to an upper limit range of between Kshs. 1 to Kshs. 12 million will be payable. On subsequent death 70% or 100% will be payable to the next of kin depending on whether the benefit is stand-alone or accelerated.
Group Disability Income Insurance:
This rider Compensates for lost income during the disability period. The employer chooses the maximum period for disability benefit payment either 2years, 5years or up to normal retirement age.
Temporary Total Disability:
This benefit is payable if a member becomes wholly but temporarily incapacitated by bodily injury following his usual occupation hence unable to earn an income. The benefit payable is the actual weekly earnings for periods ranging between 1 to 2 years.
This rider compensates for medical bills spent by the insured up to the agreed limit.
What happens in the event of death of the Life Assured (employee)?
Jubilee should be notified immediately on death of the Life Assured. In order for the claim to be paid, the employer should do the following:
- Have the claim form duly completed and signed
- Provide the original police abstract or original postmortem report if death was caused by an accident.
- Submit a certified copy of the Life Assureds’ identity card
- Certified copy of last pay slip
- Original death certificate
How can I set up a group life assurance policy form my employees?
- Submit a duly executed Group Master Proposal Form.
- List of active members, with their relevant details (name, membership number, date of birth, salary) duly signed by authorized officer of the Assured.
- Application form and proof of age of each member (a period not exceeding 60 days can be allowed for this requirement especially for big schemes due to logistics involved)
Once the above are received (especially the premium, and listing of members) an initial costing schedule is prepared as at the commencement date and on the same basis as the quotation. The initial costing is necessary because the quotation details may not have been exact, especially members’ salaries and dates of birth. These have to be adjusted when doing the initial costing.
Medical examination reports, in respect of members whose sums assured exceed the free cover limit, are also called for using the details on the initial costing.
There after a policy document prepared and reinsurance cessions done.