Remember the old cliché – life’s two certainties are taxes and death?

As with disability, no one intends dying whilst in service with their employer.
Equally, the planning for this contingency can have a dramatic impact on the financial planning for one’s family.
Integrate this into TrueNorth for a comprehensive financial wellness plan.

How group life benefits are structured and taxed

Distinctly different from the personal life insurance policies that most of us take out at various milestones in our lives, the group life benefits associated with a company sponsored retirement fund are structured differently.

Substantially cheaper on a group basis than for individual policies, group life cover usually has a free-cover limit whereby cover up to this limit is provided without any underwriting criteria and therefore benefits those employees who would otherwise not be medically fit to buy life insurance.

Depending on whether the cover is an approved or unapproved the premium for this life cover is claimed as a tax deduction (an approved benefit) or is not claimed (an unapproved benefit) the benefit is received after being taxed or is not taxable at all.

Continuation options are usually included, whereby an exiting member may convert this group life cover to an individual policy. This individual policy is available without medical underwriting thereby guaranteeing the exiting member to the life cover after exiting.