Group Schemes Flashcards
A group life insurance policy is a contract between which parties?
Employer and life office
In a group life scheme arranged by an employer, is the employee party to the contract?
No
If the insured under a group life policy that is in trust dies, is IHT payable on the claim value?
No
The cost of group life insurance is usually based on a unit rate system. Explain how this works
The unit rate system is based on the average age of those covered and the total sum insured for the year.
How is income protection benefit taxed on an employee?
Through the employers payroll, subject to income tax and national insurance contributions.
What is the usual survival period before a group critical illness policy pays a claim?
30 days after diagnosis
If there is a claim under a group critical illness policy who would the benefits be payable to?
The employee.
What is the typical level of life cover for a group life scheme arranged by an employer?
4 times their salary
How long will cover last on a group life scheme arranged by an employer?
Until the employee leaves or retires.
Why is there usually no IHT on a group life policy claim?
Because its usually arranged under a discretionary trust.
On a group critical illness cover policy, if an employer pays the premium is this taxable on the employee?
Yes because if the employer pays the premium this amount is added to the employees income and is taxed on them.
