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Unum revamps group life, introduces 'Master Trust'

05 July 2010 Breaking News

Unum, the life and disability insurer, has set up a facility which enables employers who offer their employees group life cover to pay out claims free of tax. 

The move is one of a number of changes Unum is making to its group life proposition, effective from today.

Prior to the introduction of the new feature, companies would have to set up their own discretionary trust as the only way for the claims to be paid tax-free. Unum said that this can be expensive, requires ongoing maintenance and is usually time consuming. The insurer said that its move should appeal to most companies, but especially to SMEs.

Helene Gullen, commercial marketing manager at Unum, said that the need to set up a trust can act as a "real barrier" to firms introducing this form of financial protection for their workforce, particularly with SMEs.

"By using the Master Trust, for which there is no additional charge, our clients can ensure that they get all of the tax benefits with none of the associated time-consuming and complex administration," she said.

Other changes to Unum's Group Life offering include and increase to its maximum free cover limit from £1.75m to £1.8m. Unum has also removed the time limit on late entry - the only additional underwriting requirements for late entrants (joining more than six months after they are first eligible) will be a short form for benefits in excess of £250,000 and below the free cover level. It has also announced an increase in the maximum lump sum available from 12 to 20 times salary for schemes of more than 20 lives where there is no dependants pension on the group with Unum or another insurer. The is an increase in Unum's standard £15m travel restriction rule to £25m, while categories of three lives or more will eligible for a free cover limit - previously it was set at a minimum of five lives.

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