Getting to the bottom of benefits

How well do you know your employee life insurance schemes? Many employers fall into the trap of assuming their assurance is up to date – however, few know the three components of Group Life Assurance (GLA), its proper technical name, need on-going reviews just the same as other benefits.

Paul Avis, Group Marketing Director at Canada Life, recently revealed to us the specifics of these benefits and discussed Registered lump sum policies, Excepted lump sum policies and Death in Service Pension policies with us.

“Registered group life schemes provide benefits within the Lifetime Allowance,” explains Avis, “whereas Excepted schemes are outside this limitation. For anyone with any kind of fixed or enhanced protection, or affected by the reduction from £1.25m to £1m in April 2016, Excepted schemes make good sense on the face of it.”

But it is not that simple, as Avis adds that implementing an Expected scheme requires specialist tax and legal advice. “2016 saw 29% growth in Excepted scheme premiums, so it is clear from the client demand that a review is needed as many may be unaware of the additional Trustee responsibilities that these scheme bring and the fact that they could be liable to initial and periodic tax charges.” He added. “Removing the death benefit from the £1m Lifetime Allowance seems a simple and sensible decision to make but it is actually more complex than this.”