BusinessCoronavirus

Employer group life insurance pays out £93m in Covid claims, GRiD says

The average lump sum death benefit payment was £100,320 and the average capitalised value of the dependants’ pensions was £617,771

Group Risk Development (GRiD) has revealed that up to and including 31 December 2020, the dependants of 891 employees with group life benefits have received payouts totalling over £93m after losing their loved ones as a result of Covid-19.

The firm said this represents 884 lump sum death benefit claims, plus the capitalised value of seven dependants’ pension claims where Covid-19 has been recorded as the primary or secondary cause of death on the death certificate or reported on the claim form.

The average lump sum death benefit payment was £100,320 and the average capitalised value of the dependants’ pensions was £617,771.

As there is a delay between the date of death and date of payment, GRiD added the “true impact” of Covid-19 lump sum death claims may be understated in these figures by at least 14%, meaning that the true figure may be in the region of £105m with the number of families supported nearer to 1,000.

It said the impact of the second wave of deaths throughout the winter of 2020 in the UK will also not be fully captured by these figures.

GRiD also revealed that according to the ONS, there were 7,961 deaths of working age people that were attributable to Covid-19 registered between 9 March and 28 December 2020, which means the group risk industry supported around one in nine (11%) of these grieving families.

While some of the dependants of employees who did not have group life insurance may have had benefits paid from other sources such as individual policies, public sector or uninsured employer arrangements, it’s likely that the majority of the families of people who died from Covid-19 did not receive any death benefit payment at all.

Katharine Moxham, spokesperson for GRiD said: “Employer-sponsored group life insurance products are the most popular group risk employee benefit in terms of take-up but they are often considered a hygiene factor.

“However, these figures provide compelling evidence that group life insurance should remain core to all employee benefits packages as it provides significant financial support for dependants at an extremely difficult time.”

Show More
Back to top button