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What is International Group Life Insurance?

International Group Life Insurance works much the same as any business life insurance scheme – except it has been especially designed for companies with employees in different parts of the world.

If any employee covered by the scheme was to sadly pass away, a substantial sum is paid out to their beneficiaries, typically family. The amount paid out will depend on what the employer has stipulated in the policy.

You may also see the policy referred to as International Business Life Insurance, or International Company Life Insurance.

How does International Group Life Insurance work?

As mentioned, International Group Life Insurance pays a lump sum to the beneficiaries of an employee, should they pass away while employed with your business. The company pays a regular premium to the insurance company in return for coverage. 

Unlike single country plans, International Group Life Insurance can cover a multitude of employees across numerous countries. This allows you to put in place, one centrally managed plan, providing a consistent level of benefit and efficient administration which is run via a single contract.

International Life Insurance is also useful for globe trotting employees because they can remain on the same plan even if they move from one country to another. 

Employers select how much coverage to offer at the start of the policy. This can either be a specific fixed amount or based on a percentage of an employee’s salary. The most common coverage supplied by businesses is 2x and 4x an employee’s salary, although some insurers will allow up to 15x salary coverage.

For example, if an employee earns £40,000 a year, and is provided with life coverage of 2x their salary, then £80,000 will be paid out by the insurer should the worst happen.

International Group Life Insurance operates straightforwardly but offers various different benefits through a single contract. By acquiring our International Group Life Insurance, we enable companies to secure credit for each employee at a much better price than purchasing an individual policy for each person.

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What are the benefits of an International Group Life policy?

  1. Financial value: As with any insurance scheme, the more employees included, the lower the premium per person. Life insurance is also one of the lowest cost forms of coverage a company can provide to its employees.
  2. Simplified processes: One central plan for multiple people, wherever they are in the world.
  3. International: As above, but worth reiterating that global coverage reduces both cost and complexity of setting up separate schemes in different countries.
  4. Flexibility: The amount paid can either be a fixed amount or based on a percentage of the employees’ salary – this also affects the premium.
  5. Limited medical checks required: In most cases an employee’s medical history does not need to be disclosed as part the premium calculation.
  6. Recruitment & retention: A life insurance scheme with such wide scope will be an attractive proposition to jet-setting employees. It also demonstrates your duty of care to every employee wherever they are in the world.

What are the common exclusions to look out for?

Terms and conditions of an International Company Life Insurance scheme will vary – as with any insurance product. Some of the key exceptions to look out for include:

  • “Red listed” countries: A number of insurers do restrict and exclude coverage for countries which are listed by the UK FCO (Foreign & Commonwealth Office) as ‘advised against all travel’.
  • Combatants: An employee ‘actively at war’ will not be covered by the policy
  • Individuals & pairs: The policy will need to cover at least three employers, so it’s not suitable for individual’s and two-person teams.
  • Catastrophic events: All International Group Life Insurance policies will include an upper cap should numerous employees all die in one event, known as a ‘catastrophic event limit’ or ‘single event limit’. The maximum payout will be laid out in the terms.
  • Locally contracted employees: Some insurers will only offer coverage to centrally contracted employees, but it is possible to set up International Group Life schemes which cover locally contracted employees too. It will depend on the regulatory status of the country in question.
  • Age limits: Generally speaking, International Company Life Insurance providers offer cover for employees up to the age of between 65 and 75. Only in exceptional circumstances will an insurance provider consider offering coverage for older employees.

"We appointed Engage Health Group to our plan and through their negotiation, we saved £9,000 on our annual premium without having to change insurers.”

International Trade business, Dubai

How much does International Group Life Insurance cost?

The cost of International Company Life Insurance is low compared to many other international employee benefits. The price of a policy is calculated based on a number of factors including:

  • Employee age
  • Employee country of residency
  • Salary roll
  • The fixed benefit, or salary multiple, selected
  • Whether the scheme is compulsory or voluntary
  • Whether you are including coverage for dependants

 

Due to these variables, pricing can only be provided on a case-by-case basis. However, we have included a few examples of International Group Life Insurance quotes for you below to give you an idea:

Example 1: 15 employees covered, voluntary scheme, no dependants, 3x salary, total sum assured £3,423,178

Price range: £7,847 – £10,602

Example 2: 13 employees covered, compulsory scheme, no dependants, 4x salary, total sum assured £2,546,915

Price range: £4,037 – £5,226

Example 3: 35 employees covered, voluntary scheme, no dependants, 4x salary, total sum assured £6,857,079

Price range: £10,325 – £13,367

Frequently Asked Questions

Do International Company Life Insurance policies require underwriting?

Employees covered under an International Group Life Insurance plan, do not have to complete any underwriting forms if the benefit amount which is being offered to them is under the ‘Free Cover Limit’ the insurer has quoted. For example, an employee on a salary of £40,000 a year and receiving an International Business Life Insurance benefit of 4x salary, would have a benefit amount of £160,000.

 

If the insurer quotes a Free Cover Limit of £250,000 then no underwriting form would be required, but any employees earning over £62,500, and receiving a 4x salary benefit, would need to go through underwriting.

 

International Group Life Insurance underwriting, for employees above the Free Cover Limit, generally entails completing a health declaration or health statement which requires the answering of around 15 medical questions. The insurer will then assess this application with a view of either accepting or declining cover over the free cover limit.

Do all employees need to be included on an International Group Life scheme?

The majority of insurance providers will let you choose whether you want your insurance to be compulsory or voluntary, and this will be a factor when quoting for the scheme.

 

A compulsory scheme means that all employees automatically form part of the group as soon as they meet the eligibility criteria.

 

A voluntary scheme means that employees will only form part of the scheme once the insurer is instructed to include them. However, they must still meet the eligibility criteria.

How does International Group Life Insurance work across different currencies?

You can typically select your policy currency between; US Dollars, British Pounds or Euros.

 

When an employee’s salary differs from the policy currency, the sum insured for that employee with be calculated at an exchange rate fixed at the policy start date for 12 months and reviewed each renewal.

Is there any general employee criteria for an International Company Life Insurance plan?

There are general criteria that most International Group Life Insurance providers require the employee population to meet.

 

For example, all International Group Life Insurance members must be actively at work* and no members are absent or expected to be absent from work due to illness or accident for a period of 2 months or more.

 

If any new members are added to the scheme or you expand into new territories, you would need to let your International Group Life Insurance provider know so they can ensure the cover is still appropriate and can complete a review if necessary. 

 

(*Note: This does not mean they have to be ‘on the job’ at the time of death.)

When implementing the International Group Life Insurance, are there any jobs that aren't included in the policy?

Almost every job is included within the insurance policy scheme. The only position which is explicitly on the restriction list is a job is where one is ‘actively at war’.

What are Expression of Wish forms?

International Business Life Insurance providers generally require each employee to complete an ‘Expression of Wish’ form as soon as they go on cover.

 

This means that should anything happen to them, they have indicated who the beneficiaries of the policy should be, and how much of the benefit they should get each if there is more than one named beneficiary. This isn’t a legally binding document but is strongly considered by the executors of the employee will.

 

Some International Group Life Insurance providers only require a form completed at point of claim, should one of the members pass away. However this requires you to already know the beneficiaries of employee, so we would therefore always recommend ensuring that you have proactively requested your employees return an Expression of Wish form for you to keep on file.

 

For clients of Engage International we would provide you with our own International Company Life Insurance ‘Expression of Wish’ form to help you avoid any future difficulties.

Can an International Group Life Insurance scheme cover both local nationals and expats?

Yes it can, however the degree to which local nationals can be covered depends on a number of factors including their specific location and the insurer.

 

The percentage of local nationals allowed can vary greatly, for example some International Company Life Insurance providers will allow a 100% local national population in the UK, however, will not allow any local nationals in the US, due to the regulatory requirements in that market.

 

The population will normally be looked at on a case-by-case basis and assessed on a number of factors including:

  • The company contracting location
  • The size of the employee population
  • The percentage of local nationals in each country
  • The local regulatory requirement in each employee location
  • The insurers risk appetite

Do employees have to be contracted centrally, or can they be contracted at a local level?

As mentioned in the ‘Common exclusions’ section, the answer to this again varies greatly from insurer to insurer and is dependent on a various factors. Some insurers prefer employees on an International Group Life Insurance scheme to be centrally contracted and will only look at locally contracted employees on a case-by-case basis.

 

Other insurers are more comfortable with local contracting so long as the insurance contract the company is signing is within a regulatory zone they are happy working within.

 

Can International Group Life Insurance plans be put into a trust arrangement?

While putting a Group Life Insurance policy in trust is common practice in many local, single country markets, International Business Life Insurance cannot be managed in a trust structure due to the multiple countries being covered, which will all have different legal and tax requirements for a trust to operate within.

 

If we implement an International Group Life Insurance scheme does every employee have to be included?

Most insurers will let you choose whether the benefit is compulsory, or voluntary, and this will be a factor when quoting for the scheme.

 

A compulsory scheme means that all employees automatically form part of the group as soon as they meet the eligibility criteria.

 

A voluntary scheme means that employees will only form part of the scheme once the insurer is instructed to include them, however they must still meet the eligibility criteria.

Can employees resident in any country be covered on an International Group Life Insurance scheme?

We can generally find solutions for employees based in any country in the world so long as their job does not involve being actively at war.

 

A number of insurers do restrict and exclude coverage for countries which are listed by the UK FCO (Foreign & Commonwealth Office) as advised against ‘all travel’.

Does International Group Life Insurance cover employees while travelling and on holiday?

Yes it does. Employees will be covered 24/7 hours a day 365 days a year while name on the Company International Life Insurance scheme, whether they are working, at home, travelling or on holiday.

 

The only exception would be if the employee were to travel to a country when the FCO has advised against ‘all travel’. In that case over is likely to be excluded.

Can dependants be covered on an International Group Life Insurance scheme?

Yes, should you choose to make this available to your employees, immediate family members (partner, spouse or child) can also be covered on the business International Life Insurance scheme.

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