COVID-19 Group Life Assurance payments
04 August 2020
In May this year, I wrote this article on the importance of employer-sponsored Group Life Assurance in the midst of the COVID-19 Pandemic. I ended that post with the following lines;
“When I joined the industry the most common benefit was usually some form of Group Life Assurance provision. It’s still there at very many employers, but often overlooked in corporate communications for the more expensive, fashionable, or multipurpose benefit offerings now available. But it remains really important.
And in 2020 many employers will be deeply indebted to that day, long ago, when some far-sighted colleague established such a scheme to protect employees, their families, and the employer too. The sad truth is that it has never been more needed.”
Yet although the above was already self-evidently true in May, there was no statistical evidence to support the assertion at that time. This has now changed with the publication last week of the industry’s Group Life Assurance claims figures for the first six months of 2020.
The research was undertaken by Group Risk Development (GRiD), and sought to quantify the number of claims made under such policies where COVID-19 was recorded as the primary or secondary cause of death on the death certificate or claim form. And using this criteria GRiD found that around £57m had been paid to more than 480 bereaved families from employer-sponsored Group Life policies to the end of June. The speed of such payments is also important, and the press release suggests that insurers take (on average) just 12.5 days to make payments once notified.
The importance of such payments really can’t be overstated. For many families, this will be a vital financial lifeline in the most awful of circumstances, and will provide some financial certainty as they cope with the inevitable emotional and practical turmoil of the death of a family member.
These figures also graphically demonstrate that that whilst COVID19 is undoubtedly more likely to be life-threatening to those in their retirement years, it is nevertheless extremely dangerous to the working-age population too. So with this in mind, I would strongly encourage employers to maintain, update, and widen their cover in this area given the possible resurgence of the pandemic in the winter months ahead.
Finally, and not least, it should again be mentioned that many more people will contract and survive the virus than die from it. Yet not all will bounce-back to full health immediately, and at least some are likely to face lengthy periods of ill-health absence from their workplace as a result. I looked at this issue last month, together with how another group insurance – Group Income Protection – can assist employees and employers in such situations too.
For more information on any of the above topics, please speak to your usual Howden Consultant in the first instance, or visit our website for other contact options. For the latest details on COVID-19 & Employee Benefits provision please visit our coronavirus hub.
Steve is Head of Benefits Strategy, Howden Employee Benefits & Wellbeing, and is an award-winning thought leader on Pensions, Employee Benefits, and Human Resources issues. He is occasionally accused of making Employee Benefits interesting.