Group Life Assurance Scheme

Group Life Assurance or Death-In-Service Benefit Scheme is a contract of insurance designed to provide for payment of a capital sum (sum assured) to the dependants of assured member of a group life assurance policy in the event of death of any of the members of the scheme within the specified period of cover (usually a year) subject to policy terms and conditions.

This is the cheapest form of assurance cover when compared to individual life assurance cover. The underwriting requirements are very favourable and not as stringent as in individual life cases, because of the fact that the assured members are covered together as a group under a single policy.

The policy has been made compulsory in Nigeria for Employers of labour (private and public) with five (5) or more employees in their employment by virtue of section 9 subsection 3 of the Pension Reform Act 2004. The Act requires the employer to maintain life insurance policy or death-in-service benefit scheme of a minimum of three (3) times annual total emolument for their employees.

Features

• The Employer is the policyholder while the Employees are the insured lives
• The scheme is arranged to provide lump sum benefits in the event of death only of any of the assured scheme members
• Policy grants cover for both accidental and natural death
• Premiums are usually paid by the Employer only
• Policy is renewable annually and Coverage is on 24 hours basis
• Provides Lump Sum cash benefits or programmed monthly/quarterly withdrawal by dependants/spouse
• The policy can be extended to cover permanent total disability, temporary total disability and accidental medical expenses
• Cover under the group policy can be converted to individual life policy after separation