Life insurance for domestic employees is an initiative that every employer should take, whether or not it is required by existing employment commitments. Its importance for the person who works in the activity is very great.
For the employer, the cost/benefit ratio is very positive, facilitating commitment. Furthermore, it is an instrument for strengthening the relationship between the parties.
Continue reading and discover the importance of life insurance for domestic employees.
What is life insurance?
Life insurance is a financial protection and support tool that is of importance to everyone who has children and dependents. If you have people that you would want to support in case of sudden death or when you are unable to continue to provide resources, life insurance is for you .
In practical terms, life insurance refers to a contract between a policyholder and an insurer. The latter undertakes to pay compensation to the indicated beneficiaries of the policyholder if certain circumstances occur as the cause of death or disability of the insured person.
The insurance proponent pays an amount called a premium, which is the price of the contracted service and which is usually paid in monthly installments, within the period of 1 year that is its normal validity. In turn, the circumstances that are protected are called insurance coverage .
Taking out life insurance generates a document called a policy. This document must explicitly state the basic conditions of the contract, such as:
- the insured;
- the beneficiaries;
- the value of the prize;
- the value of compensation;
- the covers;
- the term of validity.
The proponent is the one who will pay for the insurance, while the insured is the one over whom the insurer’s commitment hangs in the event of a loss (death or disability). Beneficiaries are the people indicated by the insured to whom the insurer will make the payment of compensation if a loss occurs.
How does life insurance work for domestic employees?
If you buy life insurance for a house help, then you are considered the policyholder and the house-help is the one insured. The beneficiaries of this policy are the ones the employee directs (anyone) as the recipients of the money in the event that he or she is suddenly gone or can’t be there to work again.
Therefore, if there is a loss involving an insured employee, the insurer must be notified by means of a formal notice of loss. Initially, this may be a simple phone call to the call center provided by the insurer for this purpose, among other things. Subsequently, the relevant documents will be prepared.
The insurer then assesses the situation and circumstances and follows the provisions contained in the insurance policy. Depending on the facts, some additional documents may or may not be requested and the employee’s beneficiaries will then receive compensation, without the need for an inventory and without paying taxes.
How important is it for domestic employees?
This means that the existence of collective agreements to that effect between employers’ and domestic workers’ unions in different regions of the country is required. Non-compliance with this obligation, even when it is a default , subjects the employer to the penalties provided for by the labor legislation applicable to the case.
Regardless of the responsibility of those who hire a domestic employee, life insurance is an excellent benefit and strongly important to this worker. In particular, it is important because of the coverage it offers, as in the case of personal life insurance, which, among others, may include the following:
- basic guarantee in the event of the insured’s death;
- permanent disability, which may be total or partial due to an accident;
- funeral assistance;
- basic basket for a certain period.
For the employer, the monthly cost is low. However, for the domestic worker, the compensation can be very significant, in addition to the funeral assistance that provides consistent support for the family in a difficult time, especially emotional. In addition, a basic food basket is provided for a period of time.
How to choose life insurance for domestic employees?
The employer is free to choose the insurance company with which to enter into the contract to provide support to the domestic employee. Some collective agreements indicate brokers and/or insurance companies with which they have some relationship, sometimes even commercial, but there is no obligation in this case and the choice is up to the employer.
Like any other insurance, choosing domestic employees’ life insurance should be done with much care as is the case when choosing a life insurance policy. To do this, the most important step is to choose a good insurance broker that is experienced, trustworthy, and well-known in the market in which it operates.
It doesn’t matter the size, but the references that the broker can provide. This is important for the contractor, as it can ensure that they have the best options that the insurance companies can offer. In this sense, your insurance broker becomes your great partner, offering the proper guidance that you need.
This way, you can make your choice taking into account the realities and circumstances of your case and that of your employee. Thus, within the options available, consider the amounts involved, the existing coverage and any other benefits present in the proposals during the quotation phase guided by your broker.
Once everything is set, make the contract effective and then inform the domestic employee. Be sure to guide him/her on how the insurance works and the different aspects involved that he/she needs to know so that he/she can also guide the family and beneficiaries that he/she has indicated.
As you can see, life insurance for domestic employees may be an obligation for the employer, but it is also essential for the employee and their family. Insurance always offers a favorable cost/benefit ratio and helps to build a positive relationship in working relationships.