death cover insurance

What Is a Nissan Cover Death Benefit?

As an employer you may be bound by certain employment conditions to compulsorily acquire and pay for death cover for your workforce. This coverage protects an employer from having to spend an enormous amount of money in case a worker dies while employed. In the event the worker is unable to continue working or is laid off the employer must cover any associated costs which are the responsibility of the employee. If this is not done, the employee could claim compensation under the terms of the policy, which could amount to a significant financial outlay.

In certain circumstances it may be preferable to get death cover insurance as opposed to income protection cover. Income protection policies are more like salary arrangements and therefore do not protect an employer against any financial loss resulting from a death or disability of an employee. For an employer there are two main factors to consider when deciding whether to include death or sick pay in the employee’s remuneration package. Firstly, it is essential that the employee’s death or disability does not reduce his earning capacity and secondly, that the amount of death or disability will not reduce the employee’s disposable income. The approach to take in these circumstances is to insure both against loss of earnings and disposable income and thus the two are treated as one.

Under normal circumstances contributions are deducted at the end of the year by the employer. However, as per the Insolvency Act the Insolvency Service has power to adjust these amounts and make them dependent upon the current market value of shares. The result is that at the end of the year if the market value of the employer’s stock has dropped the amount of contributions will be adjusted accordingly.

At the end of the financial year in May an employer must decide whether to include death cover or redundancy in the employee’s remuneration. If the employer chooses to retain the policy and its contents then he will have to pay tax on them at the appropriate rate. If however he chooses to terminate the policy and its contents then the employee would have lost some or all of his death cover. The terms and conditions of the policy would remain intact, subject to those two points. In addition, at the end of the year there may be a further lump sum payment made to the offending employer. This payment is referred to as the additional provision for death cover.

A claim to have died and then reinstate the death cover can only succeed if the employer satisfies certain conditions. Firstly, the loss must be clearly proven. For example it must be shown that the loss was due to the act or failure of the insured. Secondly, the period of time between the event and the date of the decision must be at least five years. If the period is less than five years then the claim cannot succeed.

There are circumstances where a period of five years after the date of the decision can be overlooked. These are: if the claim had been made within three years of the decision and if the premiums had not been increased. It is also possible for a period of one year to be ignored if it can be proven that the employer did not inform the insurer of the intention to reinstate the cover before the death. It is important to remember that the premiums in force from the date of the last payout will cease at this time.

The second condition, the need to show that the death cover was paid within one year, is very important. If premiums have been high then the super fund balance is likely to be low. If premiums have been low then the super fund balance will probably have been raised. The super account balance will be used to pay the premiums and the death benefit.

It should be noted that the above is an illustration and that circumstances can vary. Therefore if you were employed at Nissan until last April and then you later became self-employed you would not qualify for the Nissan Cover death benefit. If you became self-employed within the last twelve months then you would be eligible for the benefit. If you were unemployed or had stopped working you would not be able to get this kind of insurance. It is therefore essential to check what conditions apply to your circumstances if you want to be reimbursed for your loss.