Group Life Assurance (GLA) cover for employees is one of the most established, and widespread, of all the employee benefit offering in the UK. Despite this GLA is rarely a topic of interest to the HR and Benefits media, or indeed much commented on in seminars and events. All of which is something of a shame, as this is a truly important, yet often under-appreciated, benefit.

To an extent, the lack of appreciation for this benefit is understandable. After all, and by definition, GLA only actually provides a tangible benefit when an employee covered by the policy dies. For large organisations with many thousands of employees this may well be a regular occurrence, but many SME’s may (thankfully) go years, or sometimes even decades, without the death of an employee. And if no one actually witnesses the benefit being paid, it is unlikely that the real value of this offering will be fully realised by employees.

So I welcome this week’s national news story on the “cost of dying” as a catalyst to remind employers and employees alike of the importance of this benefit. The story was sparked by Sun Life’s research document “Death shouldn’t mean debt” which has just been issued. Whilst the principal focus of the document is targeted at the over 50′s, many of its findings are also relevant to other age groups also.

As the title of the report suggests, the reality is that the unavoidable costs associated with dying often result in the deceased’s family and dependants having to borrow money from family and friends, credit cards, loans, or even loan sharks to meet these sums. Now this is problematic enough for the family of a retired person who lives in separate accommodation, but think how much worse this is for a family that have lost not only a close relative, but where that individual was also an income producer for the household as well. If the deceased were the sole or principle bread-winner for that family unit, the dependants will now have to fund the funeral costs whilst simultaneously finding the funds to sustain the costs of everyday living. A nightmare scenario if no life cover is in place.

The report highlights that funeral costs have been steadily rising over the last few years. Since the initial report in 2004, funeral directors cost inflation has been a staggering 71%, far ahead of rises in either the cost of living or retail prices. Funeral costs are clearly only part of the overall costs of dying though. Certification, funeral services, burial and cremation fees and estate administration costs all add to the picture. The total estimated cost of dying according to this report is £7,114. The report found that 17% of bereaved families had to fund an average shortfall of around £1,246, and goes on to suggest that over 90,000 people may experience difficulties with funeral costs every year.

All of which just goes to strengthen the need to provide the workforce with this key, and relatively low-cost benefit. Many employees have no personal life cover at all, so it is a good paternalistic plan to at least ensure that all workers are automatically covered for some level of life cover. After all, few employers would wish to attend a loyal employee’s funeral with nothing more tangible than a few words of sympathy and a wreath.

And in my experience, the workforce appreciation of the GLA benefit rises sharply after a claim is paid. At that point other employees begin to appreciate the value of the offering, and can see tangible evidence of its importance in helping their deceased colleague’s family manage this difficult emotional and financial time.

So to sum up. GLA may have something of an image problem, but that does not mean that it is not a key element of any remuneration package. Whilst it may not always be the most sought after benefit, it’s value will be demonstrated in the times of the worst possible adversity. At such times the employer will be discharged of a moral duty, the deceased family given important financial support, and remaining employees are likely to really understand, and value, the benefit on offer.

I think that’s a pretty strong case made for GLA.

Best regards

Steve