Corporate life insurance: how does it work and who is entitled?

Corporate life insurance is contracted by companies and offered as a benefit to employees, so that they can carry out their work activities with greater peace of mind. 

In addition, it can also be used as a market strategy by companies to reduce turnover in the business environment. 

However, not all managers consider this solution for their employees, as they are not aware of its benefits or how this service works.

Therefore, it is worth checking out more about corporate life insurance and defining the best situation to hire it.

What is corporate life insurance?

Corporate life insurance is a policy contracted by the company, called stipulator, aiming to insure its employees against possible incidents. 

Coverages are varied, however, there are basic policies, which are mandatory according to the sector’s regulatory body.

Thus, if there is an incident contemplated within the contracted service, the beneficiaries can receive compensation that bears part of the costs of the incident, bringing guarantees for a certain period. 

Still, the scenarios that are subject to indemnity payment are related to the provision of services and work activities. 

However, it is up to the company to define all the terms and coverage contained in the policy . 

How does corporate life insurance work?

Corporate life insurance can be contracted by any company, association or union, where the contract contemplates a minimum number of lives . 

The policy works as a collective agreement, where the negotiation of terms, coverage, shortages and other details is not carried out individually, remaining under the responsibility of the business.

At the time of contracting, insurers require a minimum number of lives to be able to open the policy. Subsequently, there is the possibility of including new employees in the same contract. 

However, it is up to the insurer to accept adherence to the policy, since there is the possibility of being denied, if the risks offered are high for the type of contract. 

If there is an incident with the insured employee, within the term and coverage, the indemnity will be paid , in accordance with the terms established in the policy. 

In cases of accidents at work, the employee himself receives compensation. However, if natural death occurs or due to an accident at work, the receipt is borne by the beneficiaries. 

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Corporate life insurance: what is the value?

The value of a corporate life insurance policy can vary greatly, as it depends on several factors to determine the price to be charged. 

Among the main ones are: 

  • Company activity (the greater the risks of the activity, the higher the insurance value);
  • Number of lives;
  • Average age of policyholders;
  • Quantity of additional coverage;
  • Indemnity amount.

After all of the above data is provided to the insurance broker, it is possible to arrive at a total for the contract. 

In addition, in the quotation of values ​​for the policy there is other information that must be considered, such as the criteria for defining the insured capital. See below:

uniform capital

The insurance contracting company can opt for uniform capital, which means that all employees will benefit equally and compulsorily from the policy . They had a single amount of coverage. 

This is a modality recommended for small and medium-sized companies, where wage differences are smaller. 

salary multiple

In this criterion, the company chooses to establish an individual capital, based on the multiplication of the monthly salary received by the employee, based on the definition of a minimum and maximum limit for the amount of coverage. 

This modality is recommended for large companies, as it is based on maintaining the family’s standard of living after the occurrence of an incident with the insured employee. 

insured group

The insured group is a segmentation of employees, divided into: 

  • Partners;
  • Employees;
  • Interns;
  • Service providers;
  • Others.

In this way, with all the data provided, it is possible to obtain a quotation with a value close to reality, but with negotiation possibilities. 

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