International Group Life
International Group Life Insurance has been long established but is a quickly growing market as growth has lagged behind group International Private Medical Insurance for many years.
How does International Group Life Insurance work?
As with all life insurances, International Group Life Insurance (also known as International Business Life Insurance, or International Company Life Insurance) pays a lump sum to the beneficiaries of an employee, should they pass away while employed with your business.
Unlike local, single country, Group Life Insurance 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, efficient administration and run via a single contract.
This structure for International Company Life Insurance also means that employees who move to work in different countries can remain on the same plan.
The International Business Life Insurance benefit amount can either be a fixed amount or based on a percentage of the employees’ salary. 2x salary and 4x salary are the two most common multiples applied, although some insurers will allow up to 10x salary up to an overall maximum cap.
What is the maximum age employees can be covered up to on an International Group Life Insurance policy?
Generally speaking International Company Life Insurance providers offer cover for employees up to the age of between 65 and 75.
If you have senior staff over this age who have an employment contract in place some insurers may consider extending cover to them on an exceptional basis.
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.
Is there any general employee criteria for an International Company Life Insurance plan?
There is some general criteria that most International Group Life Insurance providers require the employee population to meet, including;
- All International Group Life Insurance members are 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 were to be added to the scheme or you expand into any 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.
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 Engage’s 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 the employee country locations 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 and still be included in an International Company Life Insurance scheme?
The answer to this again varies greatly from insurer to insurer and is dependent on a number of 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.
Are there any limits in a large scale incident, affecting more than one employee?
All International Group Life Insurance policies will include an upper cap should numerous employees all die in one event.
This is often called a catastrophic event limit or a single event limit. This will be stated on any quoted terms, advising the upper cap and confirming that should there be an event that resulted in multiple claims, that figure is the maximum pay out that would be payable.
How much does International Group Life Insurance costs?
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 the multitude of factors, pricing can only be provided on a case by case basis, however we have included a few example International Group Life Insurance quotes for you below to give you a feel for pricing;
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
If we implement an International Group Life Insurance scheme does every employee have to be included or can the benefit be voluntary?
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’.
What currency would the International Group Life Insurance scheme be set in, and how does it work with employee salaries in numerous 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.
Are there any job restrictions on an International Group Life Insurance scheme?
The only job restriction on most International Company Life Insurance schemes is a job which requires you to be ‘actively at war’.
Is coverage worldwide on a International Company Life Insurance?
Yes, coverage applies to events that happen anywhere in the world. Please note however that most International Group Life Insurance products have a restriction for employees who travel or relocate to an area or country where the UK Foreign and Commonwealth Office (FCO) has advised against ‘all travel’.
What is the minimum group size needed to implement an International Company Life Insurance?
Most insurers will take on groups of three employees and upwards.
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.
To find out more, discuss your specific requirements, or request some initial pricing, please get in touch via our contact form below:
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