Group Risk Development (GRiD) has today announced COVID-19 related group life claims for the calendar year 1 January to 31 December 2020*.
This is
an interim statement prior to publication of GRiD’s full group claims
statistics for 2020 later this year.
Up to and including 31 December 2020, the
dependants of 891 employees with group life benefits have received pay outs
totalling over £93m after losing their loved ones as a result of COVID-19. 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, 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. 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.
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.”
Group risk provides support amongst working
age population
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.
Whether COVID-19 related or not, the death of
a loved one is always hard to come to terms with but in the case of an employed
individual, the financial consequences of the lost earnings can often add
an additional burden to those who are grieving. This further demonstrates the significant
value of employer-sponsored group life benefits which help people of working
age who often have the most financial responsibilities.
Financial security provides emotional space
to grieve
Employers can find it difficult to know how
best to support a grieving family financially and emotionally but, by removing
any immediate financial concerns, such as mortgage or rent payments, or daily
living expenses, via group risk support, dependants are able to find the time
to mourn their loss without any unwanted money-related distractions or
complications. By giving the family this financial security, the employer allows
them the space to grieve. For most employers, the only way of affording such
substantial pay-outs is via group life assurance.
From on average of as little as £133***** per
employee per year, group life assurance pays out typically between one- and
four-times salary under discretionary trust, which means it falls outside of
probate and inheritance tax, so can be paid quickly. GRiD would remind
employers of the importance of making sure that their employees have kept their
nomination/expression-of-wish forms up to date and to move quickly (but
diligently) on receipt of the insurance payment to distribute the death benefit
appropriately.
Katharine Moxham, spokesperson for GRiD said: “The group
risk industry has and will continue to provide support to the loved ones of
deceased employees throughout the COVID-19 crisis. Our products really do the
heavy lifting when times get tough for employees and we hope that publicising
these figures means that their value can be better understood by employers and their
staff.”
Sources:
*GRiD interim
COVID-19 Claims Survey 2020: GenRe collected data on behalf of GRiD from group
life providers identifying COVID-19 claims in the period from 1 January
to 31 December 2020 and this represents a comprehensive analysis of the whole
market. This only records those cases where there is evidence of Covid or a Covid
related condition. Given this information is not always available to the
insurer, it may represent an underreporting of actual numbers. Also the figures
do not include deaths that occurred after 31st December when the
death rate was at its peak.
** The average
time to notify a group risk insurer of a COVID-19 related death claim during
2020 was 31 days and the average time taken to pay the claim after that was 19
days.
*** Provided to
9.9 million employees - Swiss Re Group Watch 2020
****2020- https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/causesofdeath/bulletins/coronaviruscovid19relateddeathsbyoccupationenglandandwales/deathsregisteredbetween9marchand28december2020#
*****Swiss Re
Group Watch 2020