Life insurance for SMEs, find out what to consider when purchasing it
Life insurance is something that everyone should consider in their planning. In turn, life insurance for SMEs has a special significance for the small and medium-sized segment.
Extending the benefits of good insurance to partners and their employees is one of the best initiatives for retaining talent in the company. However, it is important to know that some measures must be taken before hiring.
Want to know more? Read the article and find out what to consider when taking out life insurance for SMEs.
How important is life insurance for SMEs?
Life insurance is known to be one of the best benefits a company can offer its employees. In fact, along with health insurance, it is one of the strongest ways to retain talent in the organization, as well as attracting new employees.
For employees
Life insurance can provide employees with greater security and emotional peace of mind, especially when it comes to the concerns they usually have about their families. It is also an important tool for family financial planning and protection .
In addition to compensation in the event of death, life insurance can also provide funeral assistance to the insured. The benefits may also include a wide range of additional coverage , as well as various assistance services.
In SMEs, life insurance is particularly useful for strengthening employees’ self-esteem. It is a very important boost for employees as part of a quality of life program or organizational climate development program.
For the organization
Benefits of this nature, due to the effect they have on employees, translate into greater engagement and better team performance. The result of the feeling of care and belonging usually appears in improved productivity.
The organization’s assets are also protected in the event of workplace accidents, in addition to reducing the incidence of labor lawsuits. In several segments, due to union agreements, companies must take out life insurance.
However, the difference that each company can make lies in the additional coverage and services that it can offer its employees, enhancing its benefits package. This is a practice that strengthens the organization’s image.
A summary of the protection possibilities of SME life insurance can be presented as follows:
- accidental death compensation;
- compensation for permanent or functional disability;
- compensation for serious illnesses;
- funeral assistance;
- birth basket;
- support for kidnapping victims;
- possibility of including spouse and children;
- various assistance services .
What to consider when taking out life insurance for SMEs?
Some information must be obtained and measures must be considered when taking out SME life insurance. See the main ones below.
Link with the company
All employees included in the SME life insurance policy must prove their formal link with the organization. In turn, the names of the partners must appear in the company’s articles of association.
Age limits
Insurance companies adopt different age limits for taking out life insurance, almost always between 14 and 70 years of age. Therefore, it is necessary to check the age values adopted.
DPS
The Personal Health Declaration (DPS) is a questionnaire that must be completed in order to begin the life insurance contracting process. The questions presented in the DPS aim to qualify the habits and health situation of the contracting party.
Contractual term for contract cancellation
The life insurance contract may be cancelled due to default. To this end, however, the insurer must first notify the insured of the lack of payment and inform him of the period within which he has to regularise the situation without losing the policy.
Insurance company activation
In general, insurance companies maintain a call center through which the insured can contact in the event of a claim. In this case, all they need is a telephone number. Likewise, email is also used for the same purpose.
Insurance adjustment
Life insurance may see its expected compensation eroded by inflation throughout the year. Therefore, to manage the devaluations caused, the insured capital and the respective insurance premium may be updated each year of the contract.
For this purpose, the Broad Consumer Price Index from the Institute of Geography and Statistics (IPCA/IBGE) is used. In the absence of this index, the Consumer Price Index from the Economic Research Institute Foundation (IPC/FIPE) will be used to adjust life insurance.
Mandatory coverages
Due to union agreements in some segments, there are mandatory coverages that must be included in the life insurance of a company’s employees. It is important for the organization to check what these coverages are so that they are part of the contracted insurance.
