Group insurance, an interesting fringe benefit

What is group insurance, why is this benefit so interesting and what are the alternatives if you switch jobs?  

Even though not as well known as other fringe benefits such as a company car or meal vouchers, group insurance is no less interesting. In fact, it offers you, as an employee, loads of advantages. What does it entail exactly? What should you look for if your employer offers you group insurance? And what are your options if you switch jobs? We'll try to answer these and other questions here. 

A group insurance is actually a form of deferred salary. You don't get your entitlement until you retire. This also explains why the benefit of having a group insurance is less well known. Sometimes, however, you immediately feel the impact of a group insurance in your wallet. If you pay for part of the premiums, for example, that amount is directly tax-deductible.

Many group insurance policies also offer additional guarantees that can be requested from the HR department at your place of work.

• A life insurance cover that ensures your children, spouse, parents or other family members will receive a lump sum upon your untimely death. You can also use this life insurance cover as a substitute for the outstanding balance insurance when you take on a mortgage with the bank. It will quickly save you several thousand euros.
• A hospitalisation insurance which covers your hospital costs (and in many cases those of your family members).
• An insurance against the financial consequences of incapacity for work which complements the benefits of the health insurance if you cannot work for long periods due to illness or disability.

Since a group insurance is always concluded for a group of employees, determined by objective criteria, there is no such thing as an 'individual' group insurance. Yet, next to the traditional group insurance policies in which the employer determines the content of the insurance, more flexible systems keep cropping up. Such systems allow you to cover what's important to you at that particular time. If you're planning to expand your family, hospitalisation insurance and life insurance may be more appealing, while you might want to top up your nest egg ahead of retirement if you are in your 50s.  

Your employer periodically pays a premium into the group insurance for you and your colleagues. The premium is a fixed amount for all employees or a fixed percentage of your salary.

In some cases, the employer pays the full premium, in others the employee pays part of the amount – usually no more than a third of the premium. You may also deduct from your taxes the amount(s) paid by you.

Each premium contributes to your personal nest egg, which keeps yielding interest until you retire. When that time comes, the amount saved plus the interest are credited to your account.

If you switch jobs, you have the following options:

- If your new employer is also offering a group insurance, you can ask that your saved capital be transferred to your new insurer. It won't cost you anything; all you have to do is request a "reserveoverdracht" (reserve transfer) form from the new insurance company. 

- Your new employer does not offer a group insurance               

1. You can simply leave your saved capital with your previous employer until you retire, without paying any new premiums.

2. In some group insurance policies, the life insurance coverage expires if you leave the capital without paying in new premiums. In such a case, you can move the capital into a host structure that invests the amount saved in an insurance contract that will pay out a lump sum if you die before 65 years of age or when you retire.

3. You can continue to pay the premiums yourself until you retire. A good option if you have some money to put aside, or if you are starting up as a freelancer for example.

4. If you have accumulated several such savings at your previous employers, you can get them centralized in a single joint pension fund. This will certainly give you a more comprehensive overview of your savings, but you will no longer be able to transfer them to new group insurance. The capital will remain there until it is time for you to retire. 

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