Group Life Assurance
There are three options on offer:
- Group Life Assurance - Pays out a defined benefit upon death of the
member.
- Defined Contribution Risk - Lump sum death and disability cover purchased by
means of a specified contribution rate.
- Optional Risk Benefit - Flexible cover for members attained through the coupling
of a minimum level of risk cover and the option to purchase additional cover.
Group Life Assurance
Group Life Assurance (GLA) provides life cover on a defined benefit basis for
members of a group. On the death of a member, a predetermined (defined) lump sum
will be paid to the beneficiaries. Additional benefits may be added to the GLA
cover to suit the specific needs of a group.
Key features
- Paid out as a defined lump sum benefit.
- Benefits can be expressed as a multiple of salary, formula-driven or as a flat
cover (monetary) amount.
- Cross-subsidies occur between younger and older members.
Defined Contribution (DC) Risk
Defined Contribution Risk is a package that applies the principle of defined
contribution retirement funds to group assurance arrangements.
Lump sum death and disability cover can be purchased on a defined contribution basis, which means that the contribution rate is specified from the outset and the benefit (cover) varies depending on the cost.
Key features
- Fixed contribution rate specified from the outset.
- Benefits expressed as a multiple of salary.
- The multiple varies by age according to the amount of cover purchased in each age group.
Value to client
- The open-ended liability is removed by placing a cap on the overall cost of risk benefits.
- Fits into the defined contribution retirement fund framework.
- Cross-subsidies between the younger and older members can largely be removed.
- Benefits are more closely aligned to age-related needs.
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