Any right to take over Death in service insurance after leaving employment?

diggerdigger

I am 41 and have a Death in Service benefit that is a generous 4 times a good salary. This along with my joint mortgage protection, I had relied on as my safety net for my partner and 3 kids. Recently I have discovered some health issues, which has lead me to be declined multiple times for life assurance with different providers.
So now, if I got terminated tomorrow or changed jobs, I wouldn't have cover. Do I have any right to take over that employer paid policy personally, and start paying the premiums myself to maintain that insurance beyond my current employment.
And I know, Im pretty annoyed with myself already for not getting is sorted, so please no chastising.

coylemj

diggerdigger wrote: »

Do I have any right to take over that employer paid policy personally, and start paying the premiums myself to maintain that insurance beyond my current employment.

As your employer is paying the premium, the answer is 'no', the contract is between the insurance company and your employer. I had a similar benefit throughout my time with a multinational and I recall that in the early days of my time with them, we were told that we could bring the policy with us if we left but that kinda fizzled out and it stopped appearing in the annual statement of benefits.

Unfortunately, as in your case, the people who want to invoke such a mobility clause are the people with a high propensity to end up claiming so the insurance companies have probably closed it down as an option. No harm in asking your employer anyway.

Even if you could take the policy with you, you would still have to negotiate a premium for what would then be a personal policy and that could involve the same hurdles that you are encountering with other insurance companies at present.

Henry Ford III

coylemj wrote: »

As your employer is paying the premium, the answer is 'no', the contract is between the insurance company and your employer. I had a similar benefit throughout my time with a multinational and I recall that in the early days of my time with them, we were told that we could bring the policy with us if we left but that kinda fizzled out and it stopped appearing in the annual statement of benefits.

Unfortunately, as in your case, the people who want to invoke such a mobility clause are the people with a high propensity to end up claiming so the insurance companies have probably closed it down as an option. No harm in asking your employer anyway.

Even if you could take the policy with you, you would still have to negotiate a premium for what would then be a personal policy and that could involve the same hurdles that you are encountering with other insurance companies at present.

Utter nonsense.

The O.P. is referring to a G.I.O. (guaranteed insurability option) which is frequently available under employer sponsored schemes. It can apply to D.I.S. and P.H.I. and isn't underwritten. If it's part of the scheme it's an option on leaving service.

The premium will be the same as simple term assurance for the selected term (to a max. of nrd under the old scheme). Sum assured cannot exceed the D.I.S. s.a.

I've seen a client set up an individual PHI policy with an insurer who doesn't market such a product. He wasn't insurable and made a medium term claim later on.

The contract is between insurer and the pension scheme trustees btw.

In the circumstances a G.I.O. could be extremely valuable for the OP, should they leave service before nrd.

coylemj

Henry Ford III wrote: »

If it's part of the scheme it's an option on leaving service.

So cutting through the industry jargon, what you're saying is..... maybe he can, or maybe he cant i.e. you can't answer his question.

Henry Ford III

coylemj wrote: »

So cutting through the industry jargon, what you're saying is..... maybe he can, or maybe he cant i.e. you can't answer his question.

Without seeing whether or not the GIO is contained in the scheme benefits nobody could answer his question.

diggerdigger

I'm just waiting on final confirmation back from my employers broker, but they believe that there is a "continuation option" which would allow me to take over the premium payment and take the cover onwards. Broker expects that there would be an adjustment to the premium as part of the removal from the group scheme (i.e. the group discount), but would not need medical underwriting, and therefor no loading/rejection options for the insurer on medical grounds. It does sound as though its scheme specific.

Henry Ford III

diggerdigger wrote: »

I'm just waiting on final confirmation back from my employers broker, but they believe that there is a "continuation option" which would allow me to take over the premium payment and take the cover onwards. Broker expects that there would be an adjustment to the premium as part of the removal from the group scheme (i.e. the group discount), but would not need medical underwriting, and therefor no loading/rejection options for the insurer on medical grounds. It does sound as though its scheme specific.

Yes it's not an automatic option. You can only exercise it when leaving service however.

Group life premiums will always be lower.

coylemj

diggerdigger wrote: »

I'm just waiting on final confirmation back from my employers broker, but they believe that there is a "continuation option" which would allow me to take over the premium payment and take the cover onwards.

You may as you say have an 'option' to do so and I hope you do but you do not have the 'right' to do so as you are not a party to the policy. Your employer can turn around (as mine did) and remove that option tomorrow if they choose to.

Henry Ford III

coylemj wrote: »

You may as you say have an 'option' to do so and I hope you do but you do not have the 'right' to do so as you are not a party to the policy. He who pays the piper calls the tune and that's not you.

Once again you are incorrect. The option is the employee's when he/she leaves service. It's time limited, and nothing to do with the trustees.

bridster007

I copied some of the wording below from an Ir Life policy for our company.
Just so you see some exclusions.
And the age has now been reduced from 60 to 50 for us. So maybe the same for your policy.
So if you are going to rely on this you should research the detail a bit more.
I also understand it is not made available when a company is closing down completely.

You would need to be checking it every year to be honest, as terms change all the time and the Trustees may not be making members aware of the changes. In fact, many Trustees don't even realise they are responsible for this matter. This is because the premium is generally invoiced to the Company directly.




Continuation Option - This option shall apply subject to the following conditions :

a) Notice that this option is being exercised should be made in writing to the Company before the Life Assured's 60th birthday, and within 31 days of termination of cover under this policy.
b) the Life Assured may effect an individual whole of life or endowment assurance
(hereinafter referred to as the new policy) for an equal or smaller sum assured than that applicable under this policy, at the date this option is exercised.
c) the premium of the newly effected assurance, shall be at the rate then applicable based on the Life Assured’s age attained at the date of commencement of the new policy.

This option shall cease to apply where:

a) the Life Assured has been granted an immediate retirement
benefit by the Employers or a benefit under any retirement benefits scheme of the Employers.
or
b) if the Life Assured remains in the employment of the Employers after the termination of cover under this policy.

coylemj

bridster007 wrote: »

And the age has now been reduced from 60 to 50 for us. So maybe the same for your policy.

Proving my point that the employer can change the Ts and Cs whenever they chose to. And if they wanted to reduce the age limit for the continuation option to 21 (effectively killing it off altogether), they could do so.

bridster007 wrote: »

You would need to be checking it every year to be honest, as terms change all the time and the Trustees may not be making members aware of the changes.

Maybe because the company hasn't bothered to tell the trustees.

bridster007

coylemj wrote: »

Proving my point that the employer can change the Ts and Cs whenever they chose to. And if they wanted to reduce the age limit for the continuation option to 21 (effectively killing it off altogether), they could do so.



Maybe because the company hasn't bothered to tell the trustees.

The employer does not change the T&Cs. The insurance company set the T&Cs on a general basis for all their policies. It is for the Trustees to know their responsibilities.

And I think your original (incorrect) point was that it was not possible to have continuance.

coylemj

bridster007 wrote: »

The employer does not change the T&Cs. The insurance company set the T&Cs on a general basis for all their policies. It is for the Trustees to know their responsibilities.

Are you saying that there's only one policy applicable to all employers - with no variations? And the employer has no say over the level of benefits? One size fits all?

bridster007 wrote: »

And I think your original (incorrect) point was that it was not possible to have continuance.

I didn't say it was 'not possible', this is what I said ...

coylemj wrote: »

Unfortunately, as in your case, the people who want to invoke such a mobility clause are the people with a high propensity to end up claiming so the insurance companies have probably closed it down as an option. No harm in asking your employer anyway.

The fact that your scheme has had the age limit reduced from 60 to 50 shows that the insurance companies are going in the direction I suggested, they will progressively reduce the age limit and eventually this option will be no longer available.

bridster007

coylemj wrote: »

Are you saying that there's only one policy applicable to all employers - with no variations? And the employer has no say over the level of benefits? One size fits all?

It's my understanding that Ir Life brought this in for all their policies at the time but I stand to be corrected if anyone knows different.

coylemj wrote: »

I didn't say it was 'not possible', this is what I said ....

Actually, this is what you said.

coylemj wrote: »

As your employer is paying the premium, the answer is 'no'

coylemj wrote: »

The fact that your scheme has had the age limit reduced from 60 to 50 shows that the insurance companies are going in the direction I suggested, they will progressively reduce the age limit and eventually this option will be no longer available.

This may well be the case, nobody is disputing it, but at the moment the option quite probably exists for the OP while you emphatically stated it didn't in such a manner as to infer you knew absolutely what you talking about. And you could not accept the correction from Henry Ford.

Henry Ford III

I'd be familiar with several schemes where G.I.O. is available to age 65.

coylemj

bridster007 wrote: »

This may well be the case, nobody is disputing it, but at the moment the option quite probably exists for the OP while you emphatically stated it didn't in such a manner as to infer you knew absolutely what you talking about. And you could not accept the correction from Henry Ford.

I was answering the question in the thread title - does the OP have the 'right' to invoke the option. As the employer and/or the insurance company can withdraw the facility at any time, the answer is still 'no'.

In the example you quoted, the option was unilaterally withdrawn for employees between the ages of 50 and 60. In the case of my company, the option was simply withdrawn altogether. Poster Henry Ford III is familiar with schemes where it's still available up to age 65 which means the same rules do not apply in all cases.

There may or may not be an option on the table when and if the OP chooses to leave the employment but at no stage does he have the right to invoke it for the simple reason that it can be withdrawn at any stage up to the day before he leaves and there will be nothing he can do about it if that happens.

I know this isn't the legal forum but lets be clear about the difference between a 'right' and an 'option'.

Henry Ford III

See post #5.

The G.I.O. is either there or it isn't. Nobody here knows as we don't have access to the scheme rules.

Group risk is a competitive area of business. Schemes often change insurers. An insurer withdrawing/diluting G.I.O. at renewal should encourage the Trustees and their Advisor look elsewhere.

bridster007

coylemj wrote: »

I was answering the question in the thread title - does the OP have the 'right' to invoke the option. As the employer and/or the insurance company can withdraw the facility at any time, the answer is still 'no'.

In the example you quoted, the option was unilaterally withdrawn for employees between the ages of 50 and 60. In the case of my company, the option was simply withdrawn altogether. Poster Henry Ford III is familiar with schemes where it's still available up to age 65 which means the same rules do not apply in all cases.

There may or may not be an option on the table when and if the OP chooses to leave the employment but at no stage does he have the right to invoke it for the simple reason that it can be withdrawn at any stage up to the day before he leaves and there will be nothing he can do about it if that happens.

I know this isn't the legal forum but lets be clear about the difference between a 'right' and an 'option'.

I'm sorry to say that once again you are wrong. It can't be withdrawn at any time. Such insurance is normally negotiated on a 3 yr broking service. The terms stay the same for each renewal within the 3 yrs. So if the option was included at the previous renewal, then the OP has the right to invoke that option subject to the terms of the policy.

Don't let your bitterness over some previous grievance cloud your "advice".

So, lets revisit what your answer should have been to the OP.
Something like this would have been good.

Yes, it's quite possible that you will be able to continue the policy. I have some experience of this myself so check if your scheme includes a continuity option and also check the terms of the policy to qualify.

coylemj

bridster007 wrote: »

Don't let your bitterness over some previous grievance cloud your "advice".

So you're an armchair psychologist and an expert in employee benefits?

bridster007 wrote: »

So, lets revisit what your answer should have been to the OP.
Something like this would have been good.

Yes, it's quite possible that you will be able to continue the policy. I have some experience of this myself so check if your scheme includes a continuity option and also check the terms of the policy to qualify.

You can add all the special effects you like, it doesn't take from the fact that I told the OP in my first post that there was 'No harm in asking your employer anyway.'

diggerdigger

So, just to come back with how this worked out. The cover is with Irish Life and there is a continuation option. The conditions, and the availability of a continuation option, are all scheme specific. The following conditions apply in my case:
It is limited to 4 x salary - Fine, as expected
The employee must be aged 50 or under - Not Really Great
Cannot be used if taking early retirement - Not Really Great
Limited to within 31 days of Group Scheme - Fine, as expected
If they you joining another Irish Life Group plan, the cover will be reduced by the amount of the amount of cover provided in the new scheme.
Overall it its a bit restrictive, but far better than nothing which is where I thought I was in the original post.

diggerdigger

And employer and trustees have noted that I want to be advised in advance of any policy changes, etc and I've set reminders to recheck myself.