Looking after your family
Group life insurance provides a lump sum to your family should you die while employed by your company.
Cover is normally calculated as a multiple of your salary, although some policies pay the benefit as a pension (your employer will be able to tell you which type of cover you have).
There are normally no exclusions, so you’ll be covered whether at work or not, as long as you remain employed by the company.
The benefit is paid to a trust, so it will not be subject to inheritance tax. The trustees have absolute discretion as to whom the benefit is paid to, but they will consider any up-to-date nomination you make when establishing the most appropriate beneficiary.
You can nominate your beneficiaries using our online nomination of beneficiary service if your employer has set this up, or by completing a paper form provided by your employer. Either way they will tell you what to do. You can read more about the nomination of beneficiary process in our handy help guide.
How does it work?
Your employer will tell you if you are eligible for cover and most employees will be covered without completing any medical questions.
However, if your level of benefit is very high, you do not meet the eligibility conditions (e.g, you're over the cover cease age) or if you do not join the scheme when you are first able to do so, we will ask you to complete an online questionnaire about your health and lifestyle.
Based on your responses, and sometimes on additional evidence or medical tests we might require, we will decide if cover can be provided and if so, on what terms.
Your life insurance benefit is set up in trust. In the event of your death, any lump sum benefit will be paid to the trustees, who then forward it onto the decided beneficiary.
If your cover comes with a death in service pension benefit, it will usually be paid directly by us to your beneficiaries, depending on the trustees’ instructions.
How long does cover last for?
You will have cover for as long as you remain an employee.
- If you are absent from work due to illness or injury you will continue to be covered until you reach the age cover ceases as stated in your employer's policy.
- If you are absent due to maternity, paternity or adoption leave, cover will continue as long as you remain otherwise eligible for membership of the scheme.
- If you remain an employee after you reach the age cover ceases, you will be required to complete a medical assessment before cover can continue.
In any event cover cannot continue beyond your 75th birthday. Your life cover under this policy ceases on the day you leave employment.
What isn't covered?
There are no standard exclusions under this policy. However, there is a maximum limit applying to the group policy as a whole.
This means that if there is an event in which one or more deaths occur in the same place or while travelling together on work business, there will be what is called an event limit, which limits how much can be paid out.
For registered group life schemes, lump sum benefits will count towards your lifetime allowance. Lump sum payments are normally tax free unless your lifetime allowance is exceeded.
Death in service pension payments do not count towards your lifetime allowance, but the recipients are subject to income tax on the payments they receive.
For excepted group life schemes, lump sum benefits do not count towards your Lifetime Allowance and will not be subject to income tax. They will be subject to the normal inheritance tax rules applicable to discretionary trusts.
Group critical illness
Looking after your well-being
Critical illness cover pays you a tax-free cash lump sum if you are diagnosed with one of a number of defined serious medical conditions, undergo a defined procedure or (if the policy allows) are unable to work as a result of a total permanent disability. You can use the money in any way you choose, such as paying for additional treatments, paying off outstanding debts, or for making changes to your home.
When setting up the policy, your employer will have chosen the level of cover from those available - core conditions, additional conditions and total permanent disability - so you should check with them to see what you are eligible for.
The following is a list of the conditions covered, but you should look at the product technical guide for a complete definition of each condition.
- Alzheimer’s disease
- Coronary artery bypass grafts
- Creutzfeldt-Jacob disease
- Heart attack
- Kidney failure
- Major organ transplant
- Motor neurone disease
- Multiple sclerosis
- Parkinson’s disease
- Aorta graft surgery
- Aplastic anaemia
- Bacterial meningitis
- Balloon valvuloplasty
- Benign brain tumour
- Benign spinal cord tumour
- Cardiac arrest
- Heart valve replacement or repair
- HIV infection
- Liver failure
- Loss of a hand or a foot
- Loss of independent existence
- Loss of speech
- Open heart surgery
- Paralysis of limbs
- Primary pulmonary hypertension
- Progressive supranuclear palsy
- Pulmonary artery graft surgery
- Respiratory failure
- (Chronic) rheumatoid arthritis
- Systemic lupus erythematosus
- Terminal illness
- Third degree burns
- Traumatic brain injury
The lump sum will be paid if you suffer from one of the insured illnesses defined in the policy and survive for more than 14 days from the date of diagnosis, or where applicable, the date of surgery.
Total permanent disability
If your employer has chosen this level of cover, you will be paid a lump sum if you satisfy the chosen definition of total permanent disability.
How much cover do I have?
The lump sum benefit that is paid to you will either be a fixed amount or a multiple of your salary.
The maximum benefit that can be insured is the lower of five x your salary or £500,000. The amount of cover available will be specified by your employer.
If your benefits are set up under a flexible benefit scheme, you will be able to choose from a range of fixed amounts or salary multiples offered.
You will not normally be asked to provide medical information, but if your level of benefit is very high we will ask you to complete a simple online questionnaire about your health and lifestyle.
Based on your responses, and sometimes on additional evidence or medical tests we might require, we will decide if cover can be provided and, if so, on what terms.
Any children you have will be covered from birth until their 18th birthday, or 23rd birthday if still in full-time education. They will be covered for 25% of the value of your benefit, up to a maximum of £20,000.
How long does the cover last?
You will have the cover for as long as you remain an employee.
- If you are absent from work due to illness or injury, you will continue to be covered until you reach the age that cover ceases as stated in your employer's policy.
- If you are absent due to maternity, paternity or adoption leave, cover will continue while you remain an employee.
In any event, cover ceases on the day you leave employment.
What isn't covered?
1) Pre-existing insured illnesses exclusion
Insured illnesses are any of the illnesses defined within your employer's policy; you'll need to ask them what level of cover you have. A pre-existing insured illnesses exclusion will always apply to employees’ or children’s benefits. This means that no benefit will be paid for an insured illness where a person or child:
- has received treatment for, or
- has sought advice on, or
- has experienced symptoms of, or
- was diagnosed before entry to the scheme.
Furthermore, no benefit will be paid for a repeat claim on the same insured illness.
The criteria under this pre-existing insured illnesses exclusion shall also apply to any increase in benefit. For example, a healthy employee has joined their employer's scheme with a benefit of £50,000, but later has a minor heart attack. This heart attack wasn't severe enough to make a claim (see technical guide for specified severities). The employee subsequently increases his benefit to £100,000.
They then suffer another heart attack, this time severe enough to make a valid claim. In this situation, we would only pay the original £50,000 benefit and ignore the benefit increase for the purposes of that claim, as the insured illness existed before the benefit increase.
There are some illnesses which, for the purposes of the pre-existing insured illness exclusion, are considered to be the same e.g. heart attack and stroke. For example, if an insured person suffers from a heart attack and receives payment from a valid claim, no benefit will be payable in respect of a subsequent claim for a stroke. A full list of the illnesses that are considered to be the same can be found in the technical guide.
A claim will not be paid for children’s critical illness cover if before the child is covered by the policy (including pre-birth):
- either parent received counselling or medical advice in relation to the insured illness or related medical condition,
- either parent were aware of an increased risk of the illness or condition, or
- the insured illness or related medical condition is as a result of intentional injury caused by either of the child’s parents.
2) Related medical conditions exclusion
A related medical condition is defined as any medical condition which, in the opinion of our chief medical officer, is either directly or indirectly associated with or is likely to have led to the occurrence of the insured illness.
A claim will not be paid for an insured illness where a related medical condition existed prior to entry to the scheme, unless the insured person has neither received any treatment, nor experienced symptoms, nor sought any advice for that related medical condition for at least two consecutive years since entry to the scheme.
Where an insured person has increased their level of benefit, the related medical condition exclusion will apply to the increase in benefit.
A claim will not be paid for coma, loss of independent existence, loss of speech, paralysis of limbs, nor terminal illness or total permanent disability where a related medical condition existed before entry to the scheme or the last increase in benefit. For more details on the related medical conditions exclusion, please view the product technical guide.
Benefits paid are free of tax. The amount of premium paid by you (in a flexible benefit arrangement) for critical illness cover will be subject to tax as a benefit in kind (P11D).
Group income protection
Looking after your pay and helping you back to work
Our income protection product is called Sick Pay. This benefit provides a regular replacement income for you if you cannot work due to a serious, long-term illness or injury.
The benefit is paid to your employer, who deducts tax and national insurance and pays it to you, as normal.
How does it work?
The benefit is normally paid after you have been absent from work for an extended period, typically six months. During this period, known as the deferred period, you may receive some sick pay from your employer.
The replacement income from Sick Pay will pay a percentage of your normal salary, usually between 50% and 75%, every month while you are absent from work, for a defined period chosen by your employer. This could be anything from two years, to your state pension age depending on the policy your employer has.
Please note that simply being signed off as unable to work by your GP will not necessarily mean you qualify for benefits under the policy.
As well as the financial benefit, AIG Life will also provide you with a dedicated case manager who will support you, where possible, in making a successful and speedy return to work.
Where appropriate, they will propose treatments and therapies to assist your recovery and liaise with you, your employer and GP throughout the process.
Absences will be reported to us by your employer within four weeks of the absence commencing; this is important so that we can help you as soon as possible.
What additional services are available?
At any time, whether you are absent from work or not, you will be able to use our workplace support service, Support Matters. This can be accessed via a dedicated website, 24/7 telephone helpline, text, live chat and email. Your employer will provide you with access details.
The service provides information and support for employees on personal, family, financial and employment issues. A programme of face to face or telephone counselling is at the heart of the service.
When does the cover start?
Your employer will inform you whether you are eligible for cover.
If you are, you will be covered as long as you are actively at work on the day you meet the eligibility conditions (i.e. not absent due to illness, injury or incapacity). If you are absent at this time, you will not be covered until you return to work.
Normally, you won't need to provide any medical information, however if your level of benefit is very high, you do not meet the eligibility conditions or you do not join the scheme when you are first able to do so, we will ask you to complete a short online questionnaire.
Based on your responses, and sometimes on additional evidence or medical tests we might require, we will decide if cover can be provided and on what terms.
What isn't covered?
Where you require a licence (other than a standard UK driving licence) to carry out your work, the loss of that licence will not, of itself, be sufficient to make a valid claim.
For example, a forklift driver in a warehouse may lose their licence due to illness. Later, that person is deemed healthy and able to return to a suited occupation, such as other warehouse duties. As soon as this person is deemed healthy, our benefit payments would stop, even if they haven't yet started their new role.
How long will benefits be paid?
Your employer will have decided on the maximum payment period covered under this policy. Your employer will inform you of this (it could be for a limited period, e.g. five years, or until state pension age).
In addition, we will undertake regular reviews to ensure that you can continue receiving your benefit. If you recover and are able to work, or if you fail to participate in an agreed rehabilitation programme, the benefit will cease. You will only receive your benefit payments as long as you remain an employee, unless otherwise agreed.
How long does the cover last?
You will have cover for as long as you remain a member of the scheme.
If you are absent due to maternity, paternity or adoption leave, cover will continue while you remain an employee. In any event, cover ceases on the day you leave employment
As the payment to you is administered through your employer’s payroll, the usual tax deductions will apply.
Making a claim
Your employer will make the claim
Your employer is responsible for making claims under this policy.
Lump sums will be paid to the trustees who will decide to whom payments are made, taking into account your wishes as set out on your nomination of beneficiary form.
Where death in service pension benefits are provided these will normally be paid by us to your surviving spouse, partner and/or dependents, according to the trustees’ instructions.
Your employer is responsible for making a claim against this policy.
You will, however, be asked to provide medical details in support of the claim.
The lump sum will be paid if you suffer from one of the insured illnesses defined in the policy and survive for more than fourteen days. The survival period begins from the date of diagnosis in respect of an illness, the date of surgery where the illness requires surgery, or the date of inclusion on an official UK transplant waiting list (or date of surgery if earlier) where the insured illness is a major organ transplant.
Claims are normally paid to you within five working days from the date the claim is accepted, provided valid payment details have been given to us.
Your employer is responsible for making a claim against this policy.
You will, however, be asked to provide medical details in support of the claim and to participate in any assessment or rehabilitation as directed
by us. A claim will be paid where you satisfy our definition of incapacity and that incapacity extends beyond the end of the deferred period.
Claims will be paid to your employer and you will receive an income via your employer’s payroll.