Insight

Providing life and disability cover for global populations

Published

21 May 2025

Read time

5 minutes

Multinational companies can use a global risk provider to arrange group life and disability cover for their globally mobile employees. But, where this approach is extended to cover local nationals, it is important to understand the challenges.  

The use and appropriateness of these plans is often stretched to fulfil the needs of smaller populations of local nationals in their respective countries. This is a controversial practice, that can raise questions around compliance. 

As the duty of care to cover employees in a compliant and appropriate manner lies with the employer, it’s essential to understand the limitations and liabilities of using a global risk plan before covering local nationals.

What do I need to consider with a global risk policy? 

The simplicity of a global plan can camouflage the underlying complexities. Oliver Ferguson, Global Benefits Management Consultant at Howden, explains: “Global risk policies might seem an attractive approach, especially from an administration perspective, but they don’t take into account local expectations; the appropriateness of benefits; compliance; or taxation issues.”

Businesses should consider the following points when deciding the best approach:

Before selecting a global or local approach it is essential to fully understand the limitations and liabilities. Considering the following points will help to inform a decision. 

  • Compliance: In some markets, insurers need to be ‘locally admitted’, which is insurance speak for being appropriately registered in the country where cover is provided. This can be a problem for multi-country providers who might not be able to provide cover in these markets. 
  • Appropriateness: The benefit design should fit with local social security and regulatory regimes. A common approach is unlikely to be able to satisfy local requirements across multiple countries. 
  • Local expectations: The type and level of benefits expected by employees varies from country to country. An ‘equitable’ approach is more appropriate than ‘one-size-fits-all’. 
  • Tax: It’s important to take independent advice on the tax treatment of premiums and benefits on the employee, employer and potential recipient. The insurer may provide the cover but will not take responsibility for taxes in individual countries. Where employees are third country nationals, the tax status in their home country may also need to be considered.
Diverse group of colleagues

Using local policies to cover local nationals has additional advantages. These include: 

  • Benefit design in line with local expectations 
  • Added-value benefits aligned to local needs
  • Claims management can be smoother, especially where it uses local services and language
  • Cover is compliant with local legislation and regulation
  • Plans can be insured in local currencies

We have benefits in the UK and need to extend them in several other countries. What is the best approach?

Where a company is extending group life and disability cover to employees in additional countries, it is important to consider your benefits objectives. 

“An equitable approach would be to provide cover at the right level for the local job market and sector, personalising benefits at the country level,” says Ferguson. “It is often better to have local policies in their appropriate country that can be designed and regulated in a way that suits the local environment.” 

He recommends considering the following questions: 

  • Are benefits locally appropriate? 
  • Are they providing value for the business, and your employees? 
  • Are they tax-efficient? 
  • Can you communicate them clearly? Will employees understand them? 
  • Will they be fit for purpose as your business develops?

How will my company’s future growth plans affect its group life and disability benefits? 

It’s important to consider future plans when assessing your group life and disability benefits strategy. In many countries, once an employer offers a benefit, it is very difficult to take it away or reduce a benefit level.  

Unfortunately, we have seen instances where a global risk insurer has withdrawn cover from local nationals in a particular country or countries. This could happen when regulation, or the insurer’s appetite for risk in that country changes. 

When this does happen, it can leave the employer in a difficult position. As they are still legally committed to provide the same level of benefit, they may find themselves responsible for paying any claims that arise, out of their company coffers. 

This can be particularly costly where an employer has used the UK’s cover levels across its global plan. Few countries offer the same high level of life cover as the UK, so if a claim does arise, it could be an extremely high liability for the employer. 

Find the right solution for your business

At Howden, we have local offices in more than 40 countries that can provide the consulting, expertise and experience to ensure employees are covered in a way that’s right for their needs and the local tax and regulatory environment. Together with our International/Expat Benefits team, who can design global plans, we can ensure you get the best advice and most appropriate solution for Life and Health policies for your global populations.

Find out how Howden can help create benefits that work for your business, Get in touch with our Global Benefits Management team today.