Group Risk Insurance

Eligibility varies by employer and the specific policy terms. Generally, all permanent employees are eligible, but some employers may set specific criteria such as a minimum age or a minimum period of service.

Group Income Protection provides a regular income to an employee if they are unable to work due to illness or injury. The benefit usually starts after a waiting period and can continue until the employee returns to work, retires, or the policy term ends.

Group Critical Illness Cover provides a lump sum if an employee is diagnosed with one of the specified critical illnesses, which commonly include cancer, heart attack, and stroke. The specific conditions covered can vary between policies.

Benefits paid from life insurance and critical illness cover are generally tax-free. Income protection benefits are subject to income tax since they replace salary. Employers can usually claim premiums as a business expense, but tax treatment can vary, so it’s advisable to consult a tax expert.

In the event of a claim, the process usually involves submitting a claim form along with required documentation, such as a death certificate or medical reports. The insurer will review the claim and, if approved, will issue payment directly to the beneficiary or employee.

In most group schemes, the level of cover is determined by the employer. However, some policies offer employees the option to increase their cover by paying additional premiums.

Most insurers require a minimum of 2–5 eligible employees for a group scheme to be viable. The exact minimum varies by insurer and product. If your business is below the minimum threshold, Relevant Life Insurance is typically the most appropriate alternative for providing life cover to directors and key staff. Speak to a Cover Direct adviser to confirm which approach suits your business.

A free cover limit (FCL) is the maximum level of benefit that can be provided to an employee without requiring individual medical underwriting. Employees within the FCL receive their benefit automatically. Employees whose benefit exceeds the FCL will need to provide medical evidence to the insurer before the excess amount is covered. Your adviser will ensure you understand the FCL for your chosen policy.

Yes — many group schemes allow for tiered benefit structures, such as offering higher multiples of salary to senior staff or directors. This must be structured carefully to comply with HMRC guidelines and avoid discrimination issues. Your Cover Direct adviser will help you design a fair and compliant benefit structure.