Unum creates master trust for group life cover
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Unum has created a master trust which allows employers to pay out group life cover claims for their employees free of tax.
Previously the only way for claims to be paid tax-free was by setting up a discretionary trust.
Unum says it hopes the move will encourage small and medium-sized firms to take out group life cover as the business costs in setting up a discretionary trust are removed.
Commercial marketing manager Helene Gullen says: “In our experience, 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.”
Unum has made a range of additional changes to its group life offering. These include an increase in the maximum free cover limit from £1.75m to £1.8m and an increase in its standard £15m travel restriction rule to £25m.
The time limit on late entrants, those joining more than six months after they are first eligible, has also been removed. Instead late entrants will fill in a short form for benefits in excess of £250,000 and below the free cover limit.
The maximum lump sum has gone 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.
Categories of three lives or more will be eligible for a free cover limit. Previously the minimum was set at five lives.
The changes are effective from today.
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