A Dummy’s Guide to Small Business Staff Cover

As a small business owner, you may think that insurance cover is only something that big corporates offer their employees. But you'd be wrong. Life, disability and funeral cover are valuable employee benefits that many people look for when they are deciding where they'd like to work. So, offering these benefits is a great way of attracting the best talent to your business.

What's more, giving your employees this valuable cover is also an excellent way of protecting your business from potential financial shocks that many businesses experience when an employee passes away or gets disabled and the business is expected to help them or their family financially.

The really good news is that offering your employees this type of 'group cover’ is not complicated or expensive. In fact, thanks to a great new offering, Old Mutual SME StaffCover underwritten by Old Mutual Alternative Risk Transfer Limited, it's easier and more affordable than ever to show your employees you really care about their wellbeing.

But what exactly is 'group cover' and what do you need to know about it as an SME owner or manager? This quick and simple guide answers those questions.

What does group cover actually mean?

Group cover is sometimes called staff cover, and it is essentially a set of insurance products that are offered to a group of people – in this case, your employees. Because you’re buying this cover “in bulk”, you usually pay less per person for it than if each employee bought cover for themselves as individuals. In addition, this group cover is taken out under the company’s name, rather than each individual employee. So, as the business owner, you’re responsible for paying the overall premiums on the policy.

What kinds of group cover are there?

Staff cover usually refers to three main types of employee insurance, namely life cover, occupational disability cover, and funeral cover. The specific cover that you choose as an employer depends on the needs of your employees, as well as your company budget.

Additionally, Group cover usually lets you choose between compulsory and voluntary cover. With compulsory cover, every employee who works for you will be insured under the policy. With voluntary cover, your employees can choose whether or not they want to get the cover.

What are the benefits?

Besides the cost savings, one of the best things about group cover is that the waiting periods for full cover aren't usually as long as they would be if the person took out individual insurance cover. (A waiting period applies from the start of the cover and is the period during which no claim may be submitted). In fact, for many products there are no waiting periods and employees are able to claim from day one if they need to, especially for life and funeral benefits. The reason for these shorter (or no) waiting periods is that a group cover policy is usually less risky for the insurer. Since you, as the employer, accept responsibility for the premium payments, there's less risk that a covered person will miss their premium payments or let their policy lapse. The other major benefit is that your employees will usually all qualify for at least some cover. This isn't always the case with individual policies, where existing health conditions might have prevented a person from getting cover. With a group cover policy, all employees can be covered.

How much cover can my employees get?

As a business, you can decide how you structure the group cover for your employees. The simplest option is to have the same amount of cover for each employee, irrespective of their salary. With Old Mutual SME StaffCover, the amount of employee life and disability cover available to each employee ranges from R50 000 to R2 million. The Family Benefit, that helps to cover the costs of a funeral, offers cover ranging between R5 000 and R50 000.

Does the cover include only my employees, or their families too?

In most cases, group life cover is used to cover your employees but it also benefits their families. For example, when an employee gets life cover, they will be asked to nominate beneficiaries - which are the people who will get paid their life cover benefit if they die.

For disability cover, the covered employee is paid the benefit, which means that a lump sum is available for them to then continue supporting their families (especially important if they are the main breadwinner).

And in the case of the family benefit, the employee and their immediate family members are covered. So, if any of these covered individuals passes away, the others will receive the benefit payment to help pay for the costs of a funeral.

Is there a waiting period

 That depends on the group cover policy and the insurer that provides it. If you buy Old Mutual SME StaffCover for your employees, there are no waiting periods for funeral or life cover claims. There is a six month waiting period for disability claims, though. However, during the waiting period, employees are covered for disability caused due to an accident. And if the Old Mutual SME StaffCover policy is replacing an existing policy, the disability waiting period may be waived completely.

How difficult is it to get group cover for my employees?

Actually, it couldn't be easier or quicker. You can get Old Mutual SME StaffCover for your employees in 10 minutes. Go to www.oldmutualstaffcover.co.za to get a quote, fill in an application, or leave your details for us to call you.

#DoGreatThings and get instant [DP1]cover for your staff online.


Employees are the heart of your business – and happy employees are more productive, motivated and innovative. Here are 5 things great employers do for their staff.

Read more…

Having energised employees is absolutely crucial to a small business success. But how do you ensure this? Here are five simple ideas to avoid staff burnout in your business.

Read more…