Employer-sponsored group life insurance policies paid out almost £100 million in 2020 to cover Covid-19 claims, according to Group Risk Development (GRiD), the industry body for the group risk sector.
GRiD has reported Covid-19-related group life claims for the calendar year 1 January to 31 December 2020, ahead of publication of full group claims statistics later in 2021.
Up to and including 31 December 2020, the dependants of 891 employees with group life benefits have received payouts totalling more than £93 million after losing their loved ones as a result of Covid-19.
This figure represents 884 lump sum death benefit claims, plus the capitalised value of seven dependants’ pension claims where Covid-19 has been recorded as the primary or secondary cause of death on the death certificate or reported on the claim form.
The average lump sum death benefit payment was £100,320 and the average capitalised value of the dependants’ pensions was £617,771.
As there is a delay between the date of death and date of payment, the true impact of Covid-19 lump sum death claims may be understated in these figures by at least 14%, meaning that the true figure may be in the region of £105 million with the number of families supported nearer to 1,000, according to GRiD.
The impact of the second wave of deaths throughout the winter of 2020 in the UK will also not be fully captured by these figures.
Katharine Moxham, spokesperson for GRiD, said: “Employer-sponsored group life insurance products are the most popular group risk employee benefit in terms of take-up but they are often considered a hygiene factor. However, these figures provide compelling evidence that group life insurance should remain core to all employee benefits packages as it provides significant financial support for dependants at an extremely difficult time.”