High excess deaths have underlined the importance of employers offering death-in-service support and group life products, according to an industry body.
Group Risk Development (Grid) says it wants to see more employers offering life assurance to their employees, particularly as recent ONS data shows that excess deaths in England and Wales continued to run above the five-year trend.
The ONS figures show that in the week ending 13 January 17,381 deaths were registered in England and Wales — 19.5 per cent above the five-year average. Higher than average deaths has been an ongoing trend since the end of the pandemic.
There has been much debate around the causes for these excess deaths, with a number of factors are likely to be playing a part. This includes missed scans and regular medical appointments during lockdown, Covid, more virulent flu strains post pandemic and delays accessing treatment at present, as the NHS struggles with increased demand for its services.
Grid points out that group life assurance ensures that in the event of the death of a member of staff, the employer can offer a financial safety net to their family and dependants.
Latest Grid data shows that in 2021 the industry paid out 13,479 death claims at an average of £116,414. Meanwhile figures from Swiss Re Group Watch 2022 show 10.5m employees are currently insured for death in service benefits.
Grid spokesperson Katharine Moxham says: “During Covid, we saw many more people become aware of their own mortality and that of their close family, but as life returns to normal, it’s human nature to think these things won’t happen to us. However, this data is a stark warning that many families are indeed losing loved ones unexpectedly. This heartache can be hugely amplified, especially if the remaining family are not able to cope financially.”
Grid warns that the product name ‘death in service’ can be misunderstood and that employees may not fully understand that the product simply pays out if the individual is insured and is on the payroll – they do not need to die in the workplace itself to qualify for the benefit.
Death-in-service is generally of a significantly lower cost than other group risk products. A further benefit to the employer is that premiums can generally be offset against corporation tax.
