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Group Life
Assurance
Group life assurance is the most common employer sponsored protection benefit in the UK and often represents the sole life insurance provision for low to middle income earners.
Group life assurance provides a benefit on an employee’s death. This can be a lump sum payable to nominated beneficiaries or (less commonly nowadays) a taxable pension payable to the employee’s dependants, or both. Most group life assurance policies operate within HMRC’s regulatory framework for a ‘registered occupational pension scheme’. Lump sum death benefits can normally be paid tax-free up to the Lump Sum and Death Benefit Allowance. Generally, premiums paid by an employer to provide cover for employees can be offset against corporation tax and are not regarded as a benefit in kind.
Why do companies offer Group Life Assurance?
It's part of the culture of our company that we extend help to the dependants of our employees wherever possible. Group Life Assurance means we are able to support them financially and practically at a time when they need it most. This is one of the valuable benefits we offer, amongst others.
The numbers
Some facts and figures
11,158,083
The number of people the group risk market insured in 2023 for death benefits valued at £1.81 trillion pounds
£1,693,915,080
The group risk industry paid out 12,324 death claims in 2023, valued at over £1.69 billion
£137,448
The average claim amount in 2023, with the main causes for claim being cancer (39%) and heart disease (15%)
The embedded support within a group life 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
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.
Group
Critical Illness
Group Critical Illness works by paying a tax-free lump sum to an employee on diagnosis of one of a defined list of serious medical conditions or on undergoing one of a defined list of surgical procedures.
