More than half of UK employers do not understand life assurance payout policies


More than half (55%) of employers do not accurately understand the circumstances in which group life assurance (GLA) policies pay out, according to research by Opinium on behalf of Group Risk Development (Grid).

The research gathered opinions from 500 HR decision makers at 500 UK employers, including 100 organisations with more than 250 employees. It also showed that the percentage of employers that lack an understanding of GLA payout circumstances rises to 75% among larger organisations.

The research also found that:

  • 36% of employers incorrectly think that the employee must be on work business or at their place of work at the time of death, or die due to a work-related incident, to be eligible for a payout.
  • 45% of employers know that GLA pays out a benefit on an employee’s death for any reason, at any time while they are in employment.
  • 36% of organisations offer GLA to all staff, and a further 17% offer it to senior staff or a limited section of the workforce.
  • 91% of organisations with more than 250 employees offer GLA to some or all employees, while only 17% of those with fewer than 10 employees do so.
  • The key reasons for employers not offering GLA to staff include there being no demand from employees (34%), it being considered too expensive to set up and maintain (24%) and the lack of government promotion and incentive (13%).

Katharine Moxham, spokesperson for Grid, said: “This is truly a wake-up call to us and everyone else in the industry. More needs to be done to help employers understand the all-round benefits of GLA, not only following bereavement, but also during other difficult times for a family.

“Staff may not knock down HR’s door to demand GLA but this is a basic hygiene-level benefit and should form the bedrock of an employee benefits package. It is inexpensive, valued by staff and their families, and enables an employer to position [itself] as a caring organisation.

“We all tend to feel fairly invincible, particularly at a younger working age, and so it’s easy to understand why employees may have a preference for other more immediately tangible benefits. However, last year, group life assurance policies paid out on average £113.5k each to 9,400 families, meaning a substantial number of people were helped to avoid financial hardship after the death of a loved one. These statistics make the possibility of the death of a breadwinner rather more real, and could help employers make a more meaningful connection with their staff when communicating on the subject.”