Employees are the most valuable assets of an organisation, therefore, as an employer, you should feel accountable for their well-being and the security of their respective families. In circumstance where an employee dies a natural or accidental death, it affects not only the employee’s family but it is also unpleasant for the organisation and his/her colleagues as well. And truly, any purpose driven organisation should be intentional about ensuring that their workforce and beneficiaries are adequately taken care of.
The best role an employer can play in such a situation is to guarantee financial security to the deceased’s beneficiaries in a creative and value multiplying way. These little and thoughtful help, in such cases, can mean a lot for the dependents of the late employee. To ensure financial security for an employees’ families in such unexpected circumstances, most employers avail a Group Term Life Insurance policy.
In Nigeria, it is mandatory for all employers to maintain a Group Life Insurance policy for the benefit of its employees for a minimum of three times the annual total emoluments of the employee to serve as cushion for the employee’s beneficiaries in the event of death.
The scope of group life insurance policy is dependent on the terms and conditions on which company has taken the policy. There are different types of group insurance policies that come with life insurance cover. Employers can leverage these to extend the outcome and impact they want to achieve in the lives of their dependents beyond the mandatory minimum. And here are the different types:
Group Term Life Insurance: In this policy, lump sum benefits are payable to the beneficiary in case of the death of the employee during the period of the plan.
Group Critical Illness Rider: This plan comes with additional benefits that gives protection for any critical illness apart from the life benefits.
Group Gratuity Plan: This plan helps you as an employer to pay off your liability toward gratuity as well the life of the employee. Whenever an employee retires, resigns, or leaves the company after completing their years of employment with the company, the gratuity is paid using this fund.
Group Leave Encashment Benefits: Like the gratuity plan, this plan helps your company in paying out the liability of leave encashment to the employees with the life insurance benefits.
Group Investment-Linked Insurance Plan: Apart from life benefits, this plan offers investment benefits as well as protection to the employees. Apart from insurance benefits, your employees benefit from the investment element availed by the plan.
Group Mortgage Redemption Assurance Scheme: This group insurance plan provides insurance protection to the employees who had taken a loan in addition to life insurance benefits.
In our next article, we’d focus deeper on Group Life Insurance and how it works.
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