Following on from our last issue on compulsory membership, we wanted to provide some more information on core and flex.
This type of structure still requires compulsory membership for the core benefit but allows an additional level of death cover, which is voluntary.
This allows an employee to assess their needs and apply for extra cover based on their specific circmstances.
For example the employer may offer a core benefit of 3 x Annual Salary for Group Life Cover but also an additional flex cover of up to a maximum of 8 x Annual Salary.
A married employee with three children may choose to pay for an extra 2 x Annual Salary cover and the additional premium would be calculated using a unit rate. Alternatively a single employee with no children may feel the core cover is sufficient.
There are rules that apply to flex cover e.g. employees initially have a limited time to take up the benefit. Thereafter they are only able to adjust their cover either at certain life changing events or with the annual review of the scheme. Medical underwriting is also applicable depending on the insurer and whether a proof-free limit applies.
Yours sincerely,
The TSA Team
You’ll find all back issues of TSA Connect by visiting our blog.
All information provided is intended to inform and explain, but please remember to always check the current terms on policies when considering options and advising clients.
(Vol 8 Issue 12)
