Many companies now have their death in service cover limited, because pension providers recognise that a catastrophe may occur. As a result, many pension funds may now have inadequate cover and could face a multi-million pound exposure to fund pensions benefits – with pension fund trustees and brokers being held accountable for not maintaining sufficient protection.
In cases like this, the employer could need to step in and cover the financial difference, a move which could result in a major strain on the company’s viability. Corporate Catastrophe Cover is an insurance policy the business can purchase to bridge this gap and top up the amount over and beyond the life insurance company’s limit.
Company pension funds are designed to provide employees’ dependents with death-in-service benefits as they occur, either naturally or as a result of an accident. What they may not be able to do is accommodate the situation where a major event or natural catastrophe impacts a large number of employees in a single incident.
With many pension pay-outs required at the same, there might simply not be enough in the fund to go around and employees’ families relying on the money could receive far less than anticipated. What’s more, the capital required to provide for employees’ dependents until they die could increase this amount by around 10 times.
Larger UK businesses where there is a perceived need for additional top up Personal Accident cover.
Corporate Catastrophe Cover benefits the employing company in the event of a major event or catastrophe by