The spokeswoman for industry body Group Risk Development (Grid) said too many employees did not understand the benefits of the group life assurance (GLA) cover on offer through the workplace, largely because the bosses themselves lack knowledge about the policies.
She highlighted research carried out among 500 human resources decision makers in 500 UK businesses, which found 55 per cent of employers did not accurately understand the circumstances in which a GLA policy would pay out.
Worryingly, this rose to nearly 74 per cent for large organisations with more than 250 staff members.
Only 45 per cent of employers correctly understood that a GLA would pay out a benefit on an employee’s death for any reason, at any time while they are in employment with the sponsoring employer – whether or not this is while undertaking activities for the employer.
More needs to be done to help employers understand the all-round benefits of GLA. Katharine MoxhamMoreover, there was also a lot of misconception about eligibility for a payout. The research suggested 33 per cent of employers wrongly believed the employee would have to be on company business or at work at the time of death, or die by accident while at work to be eligible for a payout.
Ms Moxham said: "This is truly a wake-up call to us and everyone else in the industry. More needs to be done to help employers understand the all-round benefits of GLA – not only following bereavement but also during other difficult times for a family.
"Staff may not knock down HR’s door to demand GLA but this is a basic hygiene-level benefit and should form the bedrock of an employee benefits package. It is inexpensive, valued by staff and their families, and enables an employer to position themselves as a caring organisation."
The research also found 36 per cent of organisations offer GLA to all staff and a further 17 per cent offer GLA to senior or a limited number of staff.
These figures rose significantly to 91 per cent of larger organisations (with more than 250 staff) offering GLA to some or all employees, and drop to just 17 per cent for micro or small business with less than 10 employees.
Reasons for the low take-up of GLA included a belief it would be expensive to set up or maintain, at 24 per cent of respondents, while 13 per cent said the government does not promote the need for it, or provide any incentive to offer it.
Ms Moxham added: "The commonly held view amongst employers and HR decision makers ‘that GLA is expensive’ is a myth that needs dispelling. In fact, GLA typically costs less than 0.5 per cent of payroll.
"Like group income protection, policies can also include access to Employee Assistance Programmes, so the individual and their family can benefit from added-value services such as support with bereavement, relationship problems, addiction, childcare, eldercare, debt and legal worries."
Earlier this month, Brett Hill, managing director of The Health Insurance Group, said too many British firms were missing out on the benefits that implementing group policies can have, both in terms of the benefit to the staff and to the company as a whole.
Speaking on private medical insurance (PMI) provision in the workplace, Mr Hill said: "SMEs have many great selling points that attract people to work for them; often being more flexible, supportive and providing greater career opportunities than their larger counterparts.
"But they are missing a trick by assuming they can’t afford PMI, when it could be another string to their bow in helping to attract and maintain talent. Providing PMI as part of an holistic health and wellbeing package, can really help them to solidify their position as an employer of choice – demonstrating to employees that their wellbeing is a priority."
simoney.kyriakou@ft.com
