What issues should an employer consider when providing life insurance to its employees?

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Published by a ��˾��ҹ�� Pensions expert

Published on: 18 November 2013

Life insurance—basics

Life insurance benefit (life cover) can form an important part of the employee benefit package that is used to both attract and retain employees. However, there is actually no legal requirement for employers to provide life cover for their employees with the exception of any contractual requirement to do so under an employee’s contract of employment.

Life cover is usually set up as a single scheme that covers a group of, or all of, the employer’s employees. It can be linked to the business's pension scheme where life cover is only provided if the employee is also a member of the scheme. Alternatively, those employees who are not members of the pension scheme could instead receive a reduced level of life cover under the same or a separate policy.

The sum assured under the life insurance policy is often calculated as a multiple of the employee's salary, for example two, three or four times a salary. The policy will pay out a lump sum death benefit to the

Jurisdiction(s):

United Kingdom

Key definition:

Employer definition

What does Employer mean?

Also known as the client or developer. The person for whom the works are undertaken under the contract'>building contract by the contractor. Sometimes, but not necessarily, the employer is the owner of the site.

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