Review of Unum Life Insurance

Unum specialises in group life insurance provided as a company benefit. This is also known as ‘death in service’ insurance, and offers life insurance to employees while they remain working for their employer.

This is a useful way for companies to look after their employees and to attract new talent, and, for the employee, it is a cheap and convenient way of getting some form of life cover.

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Pros
  • Up to 12 x annual salary paid as benefits
  • Guaranteed cover for all staff members who are fit to work and are under the legal State Pension age at the time of joining
Cons
  • The insured person is limited to options based on what their employer sets up
  • Actively at work requirement in force unless over 100 people are covered in the scheme

About Unum

Unum is part of the large Unum Group that has its headquarters in the US and that has been going strong since the mid-19th century. In the UK, their head office is in Dorking, Surrey and they also have a number of regional offices in cities such as Glasgow, Birmingham, and London.

They currently cover more than 1.4 million people in the UK through their different employee benefits schemes such as group life, income protection, and dental insurance.

Unum life insurance options: our honest breakdown

Unum life insurance policies are available to workers whose employers take out a policy. This is typically something that runs during the period of employment with the company, although there are some exceptional cases - such as early retirement due to ill health - in which it can run past this point.

Employers can choose Registered Group Life, Expected Group Life, Simplicity Life or Spouse and Partner cover for their employees. These are all different variations on simple but effective death in service policies.

It is designed to be a cost-effective type of life insurance that is also easy to take out. The sum insured varies according to the type of policy. It will give cover either up to a multiple of the employee’s salary or else for a fixed amount.

Any employer looking to set up a policy to protect their staff should have a Discretionary Trust set up in order to handle the payment of benefits when successful claims are made. Although, in many of Unum’s policies, you have access to their Master Trust which handles this for you.

Here’s a breakdown of the specific policies offered by Unum:

Registered Group Life

This is a policy that pays out a tax-free lump sum upon death. This goes up to the Lifetime Allowance (LTA) and has to be within the HMRC regulations for this type of scheme.

  • Different levels of benefit can be given to employees, expressed as a multiplier of their salary.
  • Access to Unum’s Master Trust as part of the policy.

Excepted Group Life

With this type of cover, tax-free lump sum benefits can be paid outside of the LTA. All people being insured must have the same benefit (e.g. 5x their salary).

  • Typically used alongside a group life scheme, although can be taken out separately.
  • A separate trust and trustee bank account is required to set up the policy.

Simplicity Life

This is a simple version of the Registered Group Life policy. It is aimed at letting companies give affordable cover to their staff for the first time.

  • Same level of benefit for every employee regardless of their salary, set at a specific amount rather than a salary multiplier.
  • Cover between £10,000 and £100,000 in benefits for each member, regardless of income.
  • For PAYE employees only.
  • Have access to Unum’s Master Trust.

Spouse and Partner

This cover is available when the employer chooses it in conjunction with a Registered Group Life policy.

  • Provides a lump sum benefit to an employee if their spouse or partner dies.
  • Needs to run alongside the Registered Group Life cover.

Extra policies

In addition to their Group Life Insurance policies, Unum also offer group policies for Income Protection, Critical Illness, Sick Pay, and Dental Insurance. Using these policies you can make sure your workforce is fully covered in the event of falling ill, being unable to work for a long period of time, or death.

Unum life insurance: conclusion

The group life policies offered by Unum give an affordable and manageable way to insure your workforce. As such an established company, Unum are specialists in group insurance and a great option if you’re trying to improve the benefits you offer your employees.

Unum’s policies are very flexible, with each having many different plans available. And, additionally, their other insurance options give you the option to cover your staff for almost anything.