Our product includes an optional funeral benefit which covers the employee, spouse as well as 4 dependents. The product can also be tailored to incorporate a disability benefit, which is payable in the event of total and permanent disability of the life assured. The amount payable as a disability benefit is equivalent to the sum assured.
Further, the insurance coverage under this policy maybe extended to hedge against the risk of critical illness. A payout under a critical illness claim is triggered following diagnosis of illness that is named in the policy, for instance, cancer, stroke, heart attack and renal failure.
What is Group Life Assurance?
Accordingly, Section 15 (1) of the Pension Act 2010 stipulates that an employer shall in addition to making pension contributions on behalf of its employees, maintain a life insurance policy in favour of each of its employees for a minimum life insurance policy cover of one times the annual pensionable emoluments of the employee. The underwriting requirements for a group life assurance are very favorable and not as stringent as compared to individual life insurance policies.
Let’s assume that you have a gross monthly salary of MK1,000,000.00 which entails MK12,000,000.00 per annum. The employer is mandated to arrange, at the very minimum, life insurance equal to the one times annual salary. Thus, in the example in question, death in service will imply that your designated beneficiaries would be entitled to a sum of MK12,000,000.00. It ought to be highlighted that the employer is at liberty to arrange insurance cover at more than what is prescribed by the law. Thus, a multiple of two times annual salary would culminate into MK24,000,000.00 as a death benefit and with three times annual salary, the death in service benefit would be pegged at MK36,000,000.00 and so on and so forth.
What is the actual benefit?
It ought to be highlighted that there are a myriad benefits if you are covered under a group life assurance:
- The insurance policy provides financial succor to the family of the deceased.
- A group life assurance can be arranged to extend coverage for additional benefits such disability insurance as well funeral expenses.
- The employee doesn’t pay the premium, instead it is the responsibility of the employer to ensure that premiums are paid and up to date.
- The death benefit is paid tax-free in the event of a claim.
- For as long as the employee is on the payroll, death is covered.
For convenience and ease of administration of the scheme, we try to minimise the number of documents and forms to be completed and submitted by the client. The documents required are as follows:
- Group Proposal Form
- A schedule of details of the persons to be covered. The schedule should have the following details:
- The name
- Date of birth
- The national identification number
- Salary (annual)
The premium is payable either monthly, quarterly or annually in advance.