Pauline Iles, Principal Risk Benefits Consultant at Quantum, advises on Group Risk policies and how employers can gain a more competitive price from providers…
Make use of economies of scale
Employers with multiple policies for a group risk product should consider consolidating their policies for a competitive price, says Pauline Iles, principal risk benefits consultant at Quantum Advisory. This is because insuring a large group of employees presents a more balanced risk for providers, and can also generate a higher free cover limit because this sum is calculated based on the number of employees being insured. This means that if more employees are covered by the policy, a higher free cover limit can be achieved. A free cover limit is an amount of benefit that an insurer provides to each employee covered in the group policy without the employee needing to first provide evidence of good health.
The maximum level of free cover commonly sits at £1.25 million, with many providers offering approximately £20,000 of sum assured per employee insured, says Iles.
Employers can also take advantage of better group rates from a provider without merging policies, says Iles. Rather than amalgamating policies and perhaps losing historic features, they could amalgamate all the renewal dates and get economies of scale from their provider aggregating the overall risk.
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