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Group Critical
Illness
Group critical illness is the fastest growing group risk benefit and can be used to supplement sick pay and private medical insurance.
Group critical illness is a policy taken out by an employer to pay a tax free lump sum to an employee if they are diagnosed with a serious medical condition or they undergo a defined surgical procedure. A claim will be considered once the employee has survived for a specified period and been diagnosed with or suffered one of the conditions covered by the policy.
Where cover is paid for by an employer to provide cover for employees, corporation tax relief is given on the premiums, the employer is liable for Class 1A National Insurance contributions on the premiums and premiums are treated as a P11D benefit for employees. Group critical illness is increasingly being provided on a purely voluntary basis as part of a flexible benefits arrangement. In this case, the premium the employee pays does not qualify for tax relief.
Why do companies offer Group Risk Products?
Death or disability has a life-changing impact on staff and their families irrespective of age or role. Crucially, group risk products often also offer up extra support services which can be extremely effective in keeping people in the workplace, giving them the help they need to make life changes and supporting them back to work. These services can be used every single day. Even if a claim is never made - and can drive engagement and release money to spend elsewhere.
The numbers
Some facts and figures
£64bn
The group risk market insured 901,387 people in 2023 for critical illness benefits totalling £64.3 billion
£160,306,990
The group risk industry paid out £160.3 million in critical illness benefits to 2,062 people during 2023
£77,743
The average claim amount in 2023, with the main causes for claim being cancer (68%) and heart attack (9%)
The embedded support within a group critical illness policy means that the business, line managers and employees can benefit daily whether or not a claim is made.
In total, there were over 440,000 interactions during 2023 with the additional help and support services that are provided by group risk insurers – GRiD 2024 Claims Survey.
Expert advice should always be taken when setting up or reviewing a group risk insurance scheme to ensure that optimum cover is provided, any extra support services offered alongside the policy are used and all tax efficiencies are maximised.
Solutions
Other group risk products
Group
Life Assurance
Provides a benefit on an employee’s death, with a tax-free lump sum up to the Lump Sum and Death Benefit Allowance. Benefits can be provided via the Registered or Excepted Trust routes.
Group
Income Protection
Provides an income during longer-term sickness absence, after any short-term occupational sick pay has ceased. May also include complementary interventions, which could reduce the duration of absence.
