Life InsuranceJun 1 2015

Protection launch as small firm pension push begins

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Protection launch as small firm pension push begins

Canada Life Group Insurance has launched a new group life assurance product, designed to take advantage of the discussion advisers may be having with small employers over their auto-enrolment staging dates.

From today (1 June) the first of the smallest firms will begin to be ‘staged in’ to the workplace pension rules, which the firm calculated will mean 1.1m businesses with less than 50 employees having workplace pension ‘conversations’ over the next two years.

It added in a statement it is hoping the new product and others in the market can on the back of this grow the group life market by 1 per cent.

A test batch of small business with less than 30 employees will begin to stage from today for one year, with the rump of those with between 30-50 employees beginning to formally move into the regime from August and the final group of those with less than 30 members following in January.

All firms will be enrolled by the spring of 2017. A number of firms and others including the Association of British Insurers have argued that the process of auto-enrolment and salary sacrifice contributions could help close the ‘protection’ gap by increasing provision through employers.

Others including Legal and General have expressed support for a more formal opt-out model to encourage individuals to take out protection.

Canada Life’s ‘simply Class’ product is available on Canada Life’s Class platform, which is open to advisers. Using basic pensions data it automatically provides quotations for 1x and 2x salary and fixed benefits of £25,000 and £50,000.

Each of the four quotation options provide clear ‘reasons to buy’ information to address what employers need to know before purchasing the insurance, including costs, taxation of premiums and benefits.

It also illustrates all benefits are free from medical underwriting with full cover, regardless of pre-existing health conditions, as long as the employee is not absent from work when the policy starts.

The product is available for businesses with two to 50 employees and has a minimum premium of £480 a year, with flexible commission of up to 30 per cent available every year that the contract remains in force.

It is written under a master trust arrangement for new-to-market schemes and also includes a bereavement counselling and probate helpline.

Paul Avis, marketing director at Canada Life Group Insurance, said: “Having identified that cost... simplicity, administrative ease and reward for the adviser are the key factors for success, we have spent the last nine months deconstructing all of the traditional, technically-focused information we routinely provide.”

Last week, research from the group among 500 employers with 0-49 staff revealed that more than half (55 per cent) were prepared to consider other employee benefits when implementing auto-enrolment.

peter.walker@ft.com