More companies providing supplemental insurance to employees

Country news: Finland

April 2024

Due to demographic and financial changes, more corporations are using supplemental benefits to top up the mandatory insurance

Finland has three types of benefit systems: social security, statutory (mandatory) insurances and voluntary benefit plans. 

The mandatory employee benefits in Finland include:  an old-age pension, disability pension, survivors’ pension, short-term disability benefit and a group life benefit.

Mandatory Group Life

The mandatory group life cover is very modest and depends on the age of the employee and number of children. 

Upon the death of the employee, a lump sum indemnity is paid to the spouse, and a child’s benefit will be paid to each of the insured employee’s children under the age of 22.  If there is no spouse, the spouse’s benefit is divided between the children.  If the death is a result of an accident, a 50% accident supplement is added to the spouse’s and child’s benefits. 

The basic sum for an employee under 50 years of age is EUR 16,790 and is reduced in accordance with age.  When the employee reaches age 60, the sum is EUR 5,020.  The child supplement is EUR 8,110 for each child. The accident supplement is 50% of both the basic sum and the child supplement.  (Source:

Increasing need for supplemental group life coverage

Finland’s social security system is considered to be one of the world's best. However, changes in the financial and demographic situation have led to a decrease in the statutory benefit levels, and voluntary or supplemental employee benefit plans for all employees is becoming more common in Finland. 

It is very common to have a supplementary pension and life cover for top managers.  And Mandatum, the IGP partner in Finland, has observed that employers are seeking to be more generous to employees than what is required by extending supplemental or voluntary life insurance to ALL employees to ensure that everyone in the company has a decent amount of coverage in the event of death or disability.

Supplemental means in most cases, life and permanent disability cover on top of the mandatory cover.  The most common benefit for all employees is a lump sum life cover of 1 to 2 times annual salary.  In many cases, total and permanent disability is covered with similar lump sum amounts.

Mandatory Benefits in Finland

Benefit Benefit level in case of sickness
% of salary
Benefit level in case of occupational sickness
% of salary
Old-age pension 35 - 50% n/a
Disability pension 35 - 50% 85%
Survivors' pension 0 - 50% 70%
Short-term disability* 30 - 60% 100%
Group life Max: EUR 17,970 Max: EUR 26, 955

* Paid for one year. Employer pays full salary for 1-3 months depending on the collective agreement.

Typical Supplementary Benefits

  Risk Benefits Group Life & Disability Pension
Management 2 to 3 x annual salary Group pension: defined contribution
Retirement age: 60 to 63 years
Contribution: 0-20% of salary
Key Employees 1 to 2 x annual salary Group pension: defined contribution
Retirement age: 60 to 65 years
Contribution: 5-10% of salary
Employees 1 x annual salary Group pension: defined contribution
Retirement age: 63 to 65 years
Contribution: 2-4% of salary

What to consider for supplementary benefits

In Finland, illnesses cause approximately 85% of temporary functional disabilities and over 90% of permanent disabilities and deaths. A serious illness can have a devastating impact on an employee and their family. Supplemental benefits provided by the employer can provide additional protection to offset the hardship caused by disability and illness.

Benefits for the Employer

  • Reinforces a positive corporate image
  • Engages employees by giving them additional protection for themselves and their loved ones
  • Premiums are mostly tax deductible

Benefits for the Employee

  • Added protection for the employee and family in the event of a life crisis
  • Increased loyalty to employer and job satisfaction
  • A tax-free benefit in most cases

Supplemental Solutions from Mandatum

Mandatum offers two products for managing the financial risks associated with illness, disability, and death of employees:  Business Optimi and Group-Optimi

Business Optimi provides individual solutions for an entrepreneur or key employee.

Group-Optimi is designed for companies with more than 10 employees. It is suited for the entire personnel or a group of at least two employees and includes cover for life and permanent disability.

With the help of personal risk insurance, employers can provide financial security for employees and their families in case of serious illness, disability, or death. To learn more about products offered by Mandatum Life, click HERE.

Why partner with Mandatum Life Insurance Company Limited?

Learn more about the advantages of partnering with Mandatum Life Insurance Company Limited, view their key figures, recent awards and recognitions and get in touch with the local IGP contact.

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