GROUP LIFE ASSURANCE

Under the new Act, all employers of labour are required to establish and maintain a Group Life Assurance Policy for all their employees at a minimum amount of three times their annual total emolument defined as basic

Salary + Housing Allowance + Transport allowance.
  
The Group Life Assurance required by the Pension Act is a life assurance product covering death in service occurring within the period of insurance, administered on a collective basis to a group of people under appreciable similar exposure. It is the cheapest form of Life Assurance Policy available because it covers death within a specified period only. The inclusion of this provision in the new act is informed by the need to provide death-in-service benefit separately from contributory scheme maintained for retirement purposes. The sum assured becomes payable on the death of an employee.

The benefit (sum assured) payable upon death of an employee will be in addition to the accrued savings under the Contributory Pension Scheme and where death occurs, the Act provides under Section 5 sub-section (1) that the deceased employee’s entitlements under the Life Insurance Policy maintained under Subsection 3 of section 9 of the Act, shall be paid to his retiring savings account.

 We will appreciate it if you can furnish us with the following information on your employees to enable us make available to you the annual cost implication for this mandatory Scheme.

• Name
• Date of Birth
• Annual Basic Salary
• Annual Housing Allowance
• Annual Transport Allowance