Critical to any organisation, its health, wealth and profits, is the employee, especially when time and funds have been invested in his or her development, training and overall knowledge. Protecting individual members of staff is, therefore, essential.
As companies become internationally mobile across the world’s marketplaces there is an increasing need to have plans in place to protect employees from the unforeseen problems of life.
Commonly referred to as ‘death-in-service’, Group Life policies provide a fundamental foundation to a company’s employee benefit scheme, one that employees are increasingly seeking as they move into and through their careers. Such schemes will not only provide what was once referred to as a ‘perk’, they will also allow you to begin nurturing staff loyalty.
A Group Life policy is usually calculated on a multiple of an individual’s salary and paid out as a fixed lump sum if needed. A further option could be tailored to pay out a spouse’s and orphans’ pension to those employees with a dependent family.
Another option to consider is Critical Illness cover, whereby the employee, if unable to work full-time (or ever again) is paid a considerable lump sum benefit to help in any financial difficulties if they should be struck down by disease - invaluable if medical insurance does not cover lifetime treatments.
Similar to Group Life Insurance, an Accidental Death policy is based on a percentage of a lump sum covered under the Group Life plan and is usually a multiple of a salary or a pre-determined fixed sum paid out in addition to the death-in-service benefit.
As it sounds this type of policy pays out fractional amounts of the cover, dependent on the severity of any dismemberment, loss of appendage or sight because of an accident. It can be used in conjunction with the Accidental Death option. The types of injuries covered and the amount paid vary by insurer and package.
Long Term Disability or Permanent Health Insurance
So, your employee hasn’t died or suffered a critical illness nor does he or she qualify for dismemberment insurance, but they cannot work for a long period of time – they may have a complex fracture of a leg and unable to work for two years. You may, as an employer, want to pay, but financial constraints or cash flow will not allow you to do so for this long. Long Term Disability or Permanent Health Insurance would pay a level of income, usually as a percentage of a salary after a waiting period (often between three and twelve months) to make up lost income. This is probably the most popular benefit after Group Life to most employees.
Total and Permanent Disability
This is an alternative to Long Term Disability. The benefit is paid as a lump sum if an employee suffers a total and permanent disability and can never return to work.
In most countries in the world this is almost essential to supply or enable access to for your employees. It will help your company gain a competitive edge as well as a number of other benefits to the company such as:
- Help retain and recruit
- Help the company control ‘sick’ time off of work
- Enhance the image of your company to the employees and future candidates
Group Pension Schemes
Another way to attract, reward and retain staff is either by way of contributing a sum equal to a percentage of their salary into a pension scheme (or adding a bonus to their fund), along with required or optional contributions from the staff member.
There are numerous options on how this can be done and doesn’t necessarily have to be for the long term – savings schemes can also be set up as a means of reward of shorter periods of time to give an added incentive for employees to stay and enjoy sharing in the profitability of the company.