The government of Peru now requires employers to provide employees with compulsory life insurance, including coverage for accident and disability, from the first day of employment. The new regulation, which will better protect the health and safety of employees, was issued as Emergency Decree No. 044-2019 on 29 December 2019, to be effective in January 2020.


Prior to this change, employers were mandated to provide employees with compulsory life insurance (“seguro vida ley”) only after four years of service. The Emergency Decree was issued following the recent highly publicized deaths by electrocution of two new employees at a well-known fast food restaurant. Neither employee was covered by the company’s compulsory life insurance, as they had fewer than four years of service and were not required to be covered under then-existing requirements. To avoid these types of situations in the future, the Emergency Decree amended Article 1 of Legislative Decree No. 688 to ensure employees are covered by compulsory life insurance from the first day of employment.

Key details

Employers who do not currently provide compulsory life insurance coverage to employees with fewer than four years of service as part of their benefits packages should immediately enroll these employees in a compliant life policy with coverage for accidental death and total and permanent disability due to accident.

Coverage for accidental death and total and permanent disability is required from 1 January 2020, for all employees and immediately upon employment in the case of new employees. Coverage for natural death for employees with fewer than four years of service is not required until 1 January 2021.

The benefits mandated under the compulsory life insurance requirement are:

  • Death due to natural causes: 16 monthly salaries (upon four years of service, and upon date of hire from 1 January 2021).
  • Death due to accident: 32 monthly salaries (upon hire).
  • Total and permanent disability due to accident: 32 monthly salaries (upon hire).

For the purposes of compulsory life coverage, the insured monthly salaries are limited to the quarterly updated maximum insurable remuneration established for death, disability and funeral expense insurance in the Private Pension System (PEN 9,707.03 until 30 March 2020).

The compulsory insurance coverage can be taken out directly with any admitted insurer offering insurance that meets the statutory requirements. Although local insurance brokers can arrange the policy, the new regulation prohibits them from being compensated to implement the basic coverage. Brokers can be compensated for coverages added on top of the statutory levels and, as a result, many are brokering the statutory coverage as an accommodation.   

Policy registration

Employers will be mandated to register all life insurance policies with a central registry to enable employees to confirm their coverage. The central registry is yet to be established by the Ministry of Labor and Promotion of Employment.

Labor inspections

In the event of a work-related accident causing the death of an employee, labor inspectors are now allowed to shut down the employer’s operations for a maximum period of 30 days, during which employers would still be mandated to pay their employees’ salary and benefits. 

Please note, Labor Inspectors can issue a temporary and immediate closure of business citation if a business does not comply with the regulatory change and is not able to provide proof of coverage. Employers will be required to pay the employees’ salaries until proper coverage is issued.


Employees are now allowed to take legal action against an employer in the event of a work-related death or disability incident where there is noncompliance with health and safety rules or negligence.

Impact on employers

As a competitive matter, most employers already provide life insurance from the first day of employment, and many top up the coverage to insure full salary rather than salary capped at the statutory ceiling. Multinationals may insure 24- or 36-times monthly salary rather than 16-times monthly salary for consistency with other countries. Many compulsory life policies also include additional coverage such as credit life, benefits for repatriation of remains, reimbursement of funeral expenses, surviving children, organ transplant, dread diseases and critical illnesses.

Next steps

Employers who do not provide compulsory life insurance from the date of hire should ensure compliance with the new regulation and plan for a cost increase due to the new mandate. Businesses with large headcounts and high rates of employee turnover will experience a greater financial impact. For most employers, the cost of securing compulsory life insurance will not be very significant as it generally translates to less than 1% of salary expense.

Additional resources

Emergency Decree No. 044-2019

Supreme Decree No.009-2020-TR