All About Group Life Insurance
Group life insurance is required for employers to maintain a life insurance policy in favor of the employee for a minimum of three times the annual total emolument of the employee, according to the Pension Reform Act of 2004.
Who Needs Group Life Insurance
Employers with five or more employees of labor, clubs, associations, unions, cooperatives, religious groups and other social organizations that exist as a group will need group life insurance.
Group Life Insurance Coverage
Group life insurance will cover the death of an employee. It provides a payment of the sum assured in the event of the employee’s natural or unexpected death. Group life insurance will also cover a disappearance of an employee, which provides payment of the sum assured if the person is not seen for 12 months and there is no evidence pointing that the employee is dead.
Reasons for Group Life Insurance
There are several reasons group life insurance is required for employers and organizations in Nigeria. The main reason is to provide benefits upon the death of an employee. It also helps alleviate any expenses incurred by the employer following the employee’s death. Group life insurance also creates a good relationship between employers and employees.
Benefits of Group Life Insurance
Aside from offering peace of mind, there are many benefits to group life insurance.
Plans are also flexible, so employees can leave or join the plan at anytime. Most polices provide worldwide coverage and can be for anyone over 18 years old. Features of group life insurance typically include a yearly renewable term and a single master policy and certificates for coverage of all named employees.
Additional Group Life Insurance Options
Aside from a basic group life insurance policy, there are several additional options to add on to your company’s policy. A group personal accident option allows for coverage of an employee being unable to conduct work due to an accident. A temporary total disability option provides coverage if an employee is temporarily unable to complete their job because of a disability. A medical and surgical expenses option offers coverage if an insured person incurs medical expenses as a result of an accident. Lastly, some companies will also offer a repatriation expenses option to provide 24-hours of coverage anywhere in the world.
Requirements for Group Life Insurance
When purchasing group life insurance, one will need to provide the names of the employees or members in which they are seeking coverage for. They will also need the sex, date of birth and date of employment for such employees.
Payment of Group Life Insurance
In the event of a death of a covered employee, group life insurance will provide a payout. The sum is at least three times the annual total compensation for employees. The employer or organization must pay group life insurance premiums. The sum is paid upon the death or disappearance of an employee named in the policy.