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When should life insurance be taken out in the business field?

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Having a life policy paid for by our company is one of the social benefits for which all employees would sign. Even so, today this product remains a great unknown. We tell you when life insurance should be taken out in the business field and why this group insurance provides numerous advantages to everyone, whether they are bosses or workers.

Types of group life insurance

The pandemic has increased people’s interest in buying life insurance to protect their loved ones in the event something happens to them. It is individual life insurance. But there is another type, group life insurance, company or work. In this case, it is the company that hires you to supplement Social Security benefits.

The company can offer it as:

  • Social benefit. It assumes the total cost of the monthly policy until the end of the employee’s contract. She appears as the policyholder and the workers she deems appropriate, as insured.
  • Flexible format. It makes it easier for the employee to contract the policy individually through the company at a lower price than the market.

By grouping several policies in a single contract, savings of up to 60% can be achieved compared to an individual contract with a bank.

Mandatory collective life insurance by agreement

Companies may be obliged to provide private life or accident insurance to their employees by industry agreements, autonomous community agreements, province agreements, national agreements or the company’s own agreement.

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It is the agreement that sets the insured capital, the coverage and which group: to all employees, those who have a certain seniority…

As a general rule, the premiums to be paid vary according to age, profession and gross annual salary and, in some cases, even gender. Because although It is prohibited since the entry into force of the EU regulations against differentiation by sex From the prices applied in the insurance sector, on December 20, 1012, some insurers continue to do so.

Thus, the greater the age of the insured, the greater the premium to be paid. But it also rises if it is intended to cover professions considered at risk.

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When the company assumes the cost of the insurance, it can do so with:

  • Variable capital. It usually depends on the employee’s salary, so it varies depending on the worker.
  • Fixed capital. The same insured amount for all employees. It can go from 10,000 euros to more than 500,000 euros.
Image: Pixabay

 

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Benefits of group life insurance for the company

Although it is not obliged to offer this policy to its employees, the advantages of doing so are numerous, both for the company and for the worker.

  • It offers security and peace of mind, both to employees and their family members who are beneficiaries of your policy.
  • Allows to save costsin profit sharing, if the accident rate is low.
  • The company does not contribute to Social Security for this part of the salary allocated to life risk and/or disability insurance.
  • They are a great incentive for workers. The employer shows them that he cares about their well-being and that of their families, and that translates into greater loyalty to the company.
  • It is an inexpensive and effective way of retain talent in your business for little money. The average cost of premiums per employee is low: an average of €200 per year.
  • It is compatible with other policies and allows you to accumulate several life insurances.
  • It represents considerable savings compared to contracting individual policies.
  • The company or the self-employed worker can deduct the premiums of the life insurance of the workforce. Companies can deduct it from corporate tax and the self-employed, from personal income tax (IRPF). The only requirement is that the company irrevocably assigns the insurance rights to its employees.
  • If the worker’s beneficiaries must collect the death insurance, they will be subject to the inheritance and donation tax that they must pay by law.

The company deducts the payment of the insurance from the corporation tax, the employer deducts the personal income tax and the worker has the advantage of calculating the cost of the insurance as payment in kind

If you want to know how much it would cost to offer group life insurance to your employees, do not hesitate to contact the experts at elmejorsegurodevida.com free of charge and without obligation and you will discover the advantages of contracting it with professionals who will advise you at each step to find out what is best for your company and your workers. You can also compare prices and coverage on your own in this complete life insurance comparator. Because it is clear that the answer to when life insurance should be done in the business field is ALWAYS.

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