Optimal’s new plan provides employers with a simple to buy low cost life cover plan for employees. There is a choice of just two – £50,000 or £100,000 – sums insured for employers and there must be a minimum of three lives to cover (there is no upper member limit). The plan is targeted primarily at small and micro employers.
Optimal says a quotation can be provided in just a few seconds and the policy can be set up within minutes. There are no medical questions. Once cover starts, the policy’s premium is fixed for the year, even if new members are added. A master trust applies to the scheme.
Simple Group life will include a telephone employee assistance programme (EAP) but only at renewal after the first year. That means that when a company renews and submits the employee data the EAP will become available as part of the policy.
What They Say
Nigel Hartley, managing director, said: “We have developed Simple Group Life following extensive discussions with the IFA and employee benefit consultancy community. Well in excess of one million employers are due to reach their auto-enrolment staging date over the next few years, many of these employers currently have no protection – and crucially no financial adviser for their business, which presents a huge opportunity for the adviser community.
"There is an increased focus on employee retention and benefits packages, including death in service, however our research revealed that advisers often find it difficult to engage with their smaller and micro-sized employer clients and find products that are affordable for them. Employers in turn often believe group life to be complex, expensive and burdened by paperwork. We have used this knowledge to make it as simple as possible to put a policy in place for even the smallest of businesses.”
What We Say
"Most large firms will have a group life scheme as part of their employee benefits package and will choose benefits in line with both how much they want to spend and what they want to offer. Many SMEs though either can’t afford such benefits or else (and more likely) haven’t got round to doing anything yet. That was one of the key drivers behind introducing automatic enrolment (for pensions) and that exercise opens up opportunities for advisers to give advice on wider matters too.
"Optimal’s approach recognises that simplicity is the key for many SMEs. Consequently, it offers just two low(ish) sums insured and makes the process of buying cover about as easy as it can get. Is that better than a bespoke plan offering say a multiple of salary? Probably not but, and it’s a key but, many firms are not buying that and anything that encourages them to do something is better than them just doing nothing.
"For advisers too, it enables them to get into the complex group risk area simply and without having to invest heavily in training and marketing.
"So, this plan won’t be for every employer, but if it encourages SMEs to offer life cover when they didn’t previously, it will have succeeded.
"When we checked the website on 25 November, details of the new plan had not yet been added, almost a month after it was announced. That’s probably just a timing issue though."