Group Life Scheme
Group life assurance scheme supplements the regular income (e.g benefit from pension savings) in an unfortunate event.
THE MAIN ASPECT OF A GROUP LIFE SCHEME ARE:
- The employer is the group policy holder and a master policy is issued covering all the members of the scheme.
- The employer may pay the whole premium or the employee may contribute part of it.
- The premiums paid by the employer are allowed as business expenses.
- Claim amount is completely Tax Free.
- Free Cover Limit depends on number of members in the scheme and minimum is Kshs. 1M
FREE COVER LIMIT REFERS TO THE LEVEL OF SUM ASSURED THAT A LIFE OFFICE CAN ACCEPT ON THE BASIS OF A PROPOSAL FORM ONLY (i.e. without the required medical reports). IT IS THE AMOUNT PAYABLE IN CASE OF CLAIM ARISING WITHOUT THE DECEASED HAVING GONE FOR REQUIRED MEDICAL EXAMINATIONS. THIS, ALSO KNOWN AS NON-MEDICAL LIMITS, DEPENDS ON THE NUMBER OF MEMBERS INVOLVED AND AVERAGE BENEFIT PROVIDED.
- GROUPLIFE BENEFIT IS NORMALLY WRITTEN ON A FIXED SCALE , THAT IS, EITHER A FLAT AMOUNT FOR ALL MEMBERS e.g Fixed can be Kshs 100,000.00 or multiples of the same, OR A MULTIPLE OF ANNUAL BASIC SALARY.
- Scope of Cover – Our group term assurance policy has no exclusions on cause of death except the standard insurance exclusion of war risks, earthquake etc. We do not have HIV/AIDS exclusion clause on the term assurance. Members whose benefits are above the Free Cover Limit and test positive will be covered up to the Free Cover Limit.
RENEWAL
GROUP LIFE POLICIES ARE NORMALLY ANNUAL RENEWABLE CONTRACTS.
DATA REQUIRED FOR GROUPLIFE QUOTATION
NUMBER OF LIVES - It enables a life office to have a clear indication on the percentage of eligible lives to be covered under the policy. Lesser percentages may require medical underwriting for individual members
DATES OF BIRTH - Life premiums is dependent on the age of the assured lives. It is therefore normal practice for dates of birth to be requested before providing a quotation.
Age Limit – Maximum age limit is 65 yrs of age.
PROPOSED BENEFIT LEVEL-Proposed sum assured for computing the quotation premiums are necessary
CLAIMS EXPERIENCE -It is important to obtain claim experience, if available, in order to provide a good basis for quotations
A GROUP’S BUSINESS OR TRADE -This must be stated. Some industries tend to experience adverse claims level due to a great risk of accidents or riskier lifestyles typical of their employees
GROUPLIFE UNDERWRITING
Group life policies are underwritten on more lenient basis due to large number of people involved and the presumed spread of risk.
CONDITIONS
- The group of lives to be assured must exist for some purpose other than assurance , for example , employees of a firm or members of a co-operative society
- Evidence of Health
- Groups of advance age
- Groups engaged in hazardous occupation
- Lives who were ill at the commencement date
- Lives with sum assured above the free cover limit