Protecting your employees is important and so is offering them tangible benefits that can enhance your employer status and employment package, this is why group life insurance is a popular policy for businesses.
Group life insurance is a single policy that covers all of your employees with life insurance and in some cases accidents. As an allowable business expense in most cases, group life insurance may not cost as much as you think.
We have explored what some of the leading life insurance providers offer below.
The table below gives a quick comparison of the top UK providers for hosted phone systems.
|Type of cover
|Fixed or multiples of salary
|Fixed or multiples of salary
|Legal & General
|Lump sum or taxable dependant pension
|Lump sum, pension or combination
* The facts and figures included here come from each company’s website and were accurate at the time of writing but may have since changed. Also, please keep in mind these may not be apples to apples comparisons as each provider offers different solutions. This guide should be used as a starting off point for more research on your part.
Below we profile each of the companies’ services and features in a bit more detail.
Note companies are ranked in no particular order and this no way indicates one solution is better than another. Moreover, SmallBusinessPrices.co.uk is not regulated by the FCA and so we can’t recommend any particular product/company as being better than any other.
Some of the features and benefits of Aviva’s group life insurance.
- Cover all your staff with a single policy
- Good employee benefit
- Peace of mind for employees that their loved ones will receive something if they die
- Aviva set up a trust for the policy for you
- A flexible policy that can be adjusted
- Tax efficient as it is an allowable business expense
- Includes bereavement counselling
- The lump sum is usually exempt from inheritance tax
- Premiums aren’t classed as a benefit in kind so are not taxable for the employee
- Simple claim process
Aviva is a well-known insurance provider who offers a variety of life insurance products that include key person and group life insurance. Their group life insurance is a single policy that covers all employees and is a flexible policy so that it can be tailored to individuals and businesses.
Aviva’s group life insurance is a great way for businesses to offer an employee benefit that gives employees the peace of mind that if they die whilst employed by the business, their family will receive a cash sum payout and there is counselling support available as well.
Some of the features and benefits of RSA’s group life insurance.
- Combined product for group personal accident and business travel
- Suited to businesses who travel internationally
- Includes accidents as well as death payouts
- Will support employees abroad who die or are injured
- Includes travel insurance such as delay, cancellation, baggage and evacuation
- Incorporates personal liability insurance
- Contains cover for personal security
- Includes kidnap and detention cover
- Covers legal expenses
- Dedicated claim teams including 24/7/365 medical assistance line
RSA doesn’t offer a standalone policy for group life insurance, but their Group Personal Accident and Annual Business Travel Insurance includes this. This policy covers a wide variety of circumstances, but it is particularly useful for those businesses that operate internationally and send staff abroad for business as it covers all eventualities for them.
RSA’s policy covers both personal injuries as well as death insurance which has a fixed payout amount for certain injuries. If the employee is injured or dies abroad then they will be covered by the policy and all expenses will be paid. The policy also includes bereavement counselling for the family of the employee.
Some of the features and benefits of Zurich’s group life insurance.
- Flexible group life policy
- Comprehensive cover
- Forms a desirable part of an employee benefit package
- Shows your business as a caring employer who values its staff and their family welfare
- Lump sum for families on the death of an employee
- Additional cover for spouse or partner available
- Tax efficient benefit
- A discretionary trust must be put in place
- Automatic acceptance limit of up to £1.8 million
- Dedicated claims service with an individual case manager
Zurich offers a flexible group life insurance policy that gives businesses comprehensive cover for their employees and a great employee benefit that can enhance your business’ reputation and make it a more desirable employer. This is a tax efficient benefit as it is an allowable business expense if it is set up in a discretionary trust. It also allows employees to add spouse or partners to the policy.
Zurich’s group life cover pays out the money within 48 hours of receiving all the information needed and they provide access to a range of specialist support services such as nurses, rehabilitation and examinations.
Some of the features and benefits of Allianz’s group life insurance.
- Provides financial protection and security for employees’ families
- The benefit amount can be based on either the employee’s salary or a fixed amount
- Flexible insurance that can be tailored
- Pays out on the diagnosis of a terminal illness
- Additional cover can include accidental death and dismemberment
- Can also add cover for disability
- Cover up to 10 times gross annual salary or €2,000,000
- Can add dependants on to the cover
- Supportive claims process for employers
Zurich is an established insurance provider who offers a variety of business and life insurance products. Their group life insurance policy is designed to be flexible with a range of additional extras such as additional accidental death cover, dismemberment as well as levels of disability cover.
Zurich’s group life insurance can also include dependants at the discretion of the business. The amount of cover is flexible with a choice of a fixed amount or based on the employee’s salary with the cover up to a maximum of €2,000,000 or 10 times their gross annual salary if below the maximum.
Some of the features and benefits of Chubb’s group life insurance.
- Offers a valuable safeguard for employees
- The cover can be for the benefit of the employee or the business
- Employees receive a lump sum payment on death or weekly benefits whilst injured
- Comprehensive and flexible cover
- Can include accident cover
- Payments can be either a fixed amount or multiples of a salary
- Businesses can use the cover to financially help replace the employee
- Includes support services such as counselling, physiotherapy and rehabilitation
- Fast and hassle-free claims experience
- Provides a range of other complementary business insurance
Chubb is an international insurance provider who offers a wide range of products to businesses that cater for risk management and life cover as well as specialising in products for certain industries. Their group life insurance offers a valuable safeguard for employees and employers as it can also be used to cover the employer’s costs to replace the employee.
Chubb’s group life insurance can also cover accidents and will financially support employees whilst off work as well as pay for physiotherapy and rehabilitation. If death occurs the employee’s family will receive a lump sum and will be offered counselling services.
6. Legal & General
Some of the features and benefits of Legal & General’s group life insurance.
- Offers lump sum or dependants’ pension when an employee dies
- An attractive employee benefit
- Peace of mind for families
- The lump sum is exempt from inheritance tax
- Premiums normally qualify for tax relief
- Can cost as little as under 1% of your payroll
- Available to businesses wanting to cover more than 10 employees
- Simple to set up with medical information normally not needed
- Comprehensive employee assistance programme
- Simple and fast claim process
Legal & General offers a group life assurance policy that is a great employee benefit that is cost effective as it is classed as an allowable business expense and it can cost as little as less than 1% of your payroll costs depending on the level of your cover.
Legal & General’s group life assurance offers either a lump sum payout to the employee’s beneficiaries or as a taxable dependants’ pension on the death of an employee. The lump sum is exempt from inheritance tax and can be paid before probate. This policy is available to businesses that want to insure 10 or more employees on the policy.
7. Tokio Marine
Some of the features and benefits of Tokio Marine’s group life insurance.
- Individual and group personal accident cover
- Can cover both death and accidents
- Desirable employee benefit
- Lump sum death payout to the employee’s family
- Employee income protection if an accident or illness occurs
- Can cover employers’ profits if key person insurance is included
- Bespoke solutions to cater for different business needs
- Settles claims quickly and fairly
- One of the largest providers of personal accident insurance
Tokio Marine is one of the largest global insurance providers and in particular personal accident insurance. They offer both individual and group personal accident insurance that can benefit the employee and employer. If you select to include key person insurance, then it can help protect your company’s profits if that person is injured or dies.
Tokio Marine’s cover can include employee income protection in the event of an illness or accident as well providing a lump sum to the employees’ family if they die. They promise to act quickly and fairly when handling claims. They also create bespoke solutions to meet any business needs.
Some of the features and benefits of AIG’s group life insurance.
- Designed for small to large businesses
- Eases the financial pressures on a family when an employee dies
- Benefit can be paid as a lump sum, pension or both
- Available for three or more employees
- Cover up to the age of 75
- Offers up to 20 times salary or a fixed benefit amount
- Simple individual assessment online
- Accurate premium calculations that are guaranteed for two years
- Competitive automatic acceptance limit
- Offers a wide of policy options including support services
AIG is an insurance provider that offers a range of business products including business protection products and group protection such as group life, group critical illness and group income protection. They offer their services online with a simple online assessment for your employees.
AIG’s group life insurance is available to small to large businesses and helps to ease the financial pressures an employee’s family face after their death. They benefit from either a lump sum, pension or combination of both. Cover is offered to businesses with three or more employees up to the age of 75 with cover for a fixed amount or up to 20 times their salary.
9. Canada Life
Some of the features and benefits of Canada Life’s group life insurance.
- Tax-free payment to employee’s family
- Available for two or more employees
- Choice of fixed amount or multiple of salary
- Covers employees between 16 and 75 years old
- Easy to set up
- Policies are set up in trusts
- Can include employees that have been made redundant for up to two years
- Legal support to help families with probate issues
- Tax-deductible business expense
- Valued employee benefit
Canada Life is a financial investment and insurance provider whose products include group life insurance which is designed for businesses that have two or more employees that they want to insure. This is a desirable employee benefit that is a tax-deductible business expense.
Canada Life offers a choice of plans that can be based on fixed amounts or multiples of salaries. Their policies are eligible for employees that are between 16 and 75 years old. The policy is easy to set up and it will be paid into a trust when an employee dies and the employee’s beneficiary will receive a tax-free payment.
Some of the features and benefits of MetLife’s group life insurance.
- Offers a tax-free lump sum to employee’s beneficiaries
- Provides peace of mind to employees
- Based on the multiples of salary
- Valuable employee benefit
- Includes Group Life Employee Assistance Programme
- Can be used for some or all employees
- Empathetic and responsive claims team
- Complimentary bereavement and probate support
- Up to six face to face bereavement counselling sessions
- 24-hour helpline to provide practical guidance and emotional support
MetLife is a global insurance provider that also offers annuities and employee benefit programmes. They offer business protection products that include group life insurance which they class as an employee benefit as it provides employees with peace of mind that their family will be taken care of if something happens to them.
MetLife offers cover based on multiples of salary and will pay out a tax-free lump sum. They also provide complimentary bereavement and probate support, up to six face to face bereavement counselling sessions, and a 24-hour helpline offering practical guidance and emotional support to families.
Some of the features and benefits of Unum’s group life insurance.
- Provides a tax-free lump sum in the event of death
- Peace of mind for employees
- Based on multiples of earnings up to 12 times or fixed amount
- Provides two trust arrangements or can use your own
- Choice of products
- Provides cover for those with over three employees to protect
- Can be used for all or selected employees
- Access to key health and wellbeing support services
- Employee/Employer Assistance Programme including counselling and support
- Bereavement support
Unum is an employee benefits provider that offers financial protection products including income protection, life insurance, critical illness and dental cover. Their group life insurance gives employees peace of mind that their families will be supported if something happens to them as the policy pays out a tax-free lump sum on death whilst in service.
Unum’s group life insurance is based on either multiples of the employee’s earnings or a fixed amount. It is advised that you have a trust for payouts, they offer two trust arrangements options or you can use your own. They also provide employees access to key health and wellbeing support services and bereavement support.
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What is a group policy life insurance?
A group life insurance policy covers an entire group of persons, typically covered by a large organisation. It’s often seen as a key employee benefit that provides employer-paid life insurance. In the case of an employee’s death, it provides a tax-free lump sum to the employee’s family or designated beneficiary.
When a company provides life insurance to its workers, it is often via a group term life insurance policy. Because these group plans combine a large volume of business into a single main plan, the insurance company may provide them at a discounted cost.
Not only that, but employers often support these costs or premiums in part.
What are the typical types of group life insurance coverage?
Group life cover is often offered on a fixed-term plan, instead of permanent life insurance, on the idea that an employee would leave the employer’s employment at some point, either willingly or when they retire.
Group life insurance policies are classified into three categories:
Universal life insurance
Variable group universal life insurance is often used in executive benefit plans and pays retiree life insurance. It offers flexible insurance coverage, an assured account, and optional sub-account investment options.
Group term life insurance
Group term life insurance is the most prevalent kind of group life insurance policies. Typically, employers give this benefit to workers in a one-year, annually renewable term insurance policy.
When a policy’s term expires, both the insurance company and the employer may decide to renew. Additionally, rates may rise at the time of policy renewal.
Group life insurance policy
This combination of term and whole life insurance benefits is a group life insurance policy. You may opt to pay merely the life insurance premium or make contributions toward accumulating cash value (usually above the cost of the premium).
Among the benefits include competitive group insurance prices and more straightforward underwriting, and the possibility of cash accumulation and portability.
What is the difference between individual and group life insurance?
Unlike an individual life insurance policy, which the person owns, group life insurance plans are owned by the business. This implies that you, as the employer, are responsible for physically paying the monthly payments instead of the employee that is being insured.
What is the difference between group insurance and term insurance?
Term insurance is a kind of life insurance that provides complete protection. It offers coverage for a specific length of time in return for a predetermined premium. In the event of an unfavourable incident occurring within this coverage period, the insurance guarantees compensation, and it compensates your nominee for your income loss.
By contrast, group life insurance often takes the form of a company life insurance policy that you get as a benefit of employment.
Who is eligible for group life insurance?
Group life insurance is available to all employees or members of unions or organisations. Certain enterprises will admit you to group life insurance after a probationary period.
When you leave the organisation, your coverage will be terminated immediately or within a matter of a few weeks.
What are the benefits of group life insurance?
The primary benefit of a group life insurance plan is that it covers all members regardless of gender, age, occupation, or socioeconomic status as long as they are a part of the group seeking insurance coverage.
Cost-effective: Group insurance policies will always have cheaper premiums than individual policies.
Annuity: Certain group insurance policies include age or plans to retire that can be used as pensions after retirement.
Gratuity: Members of the group are entitled to compensation in the event of retirement or resignation if they have worked for the company for at least five years. Employers may use the capital flow generated by group insurance to build a gratuity fund via various investing alternatives.
Liability coverage: Group insurance may offer coverage for outstanding debts or mortgages in a participant’s death or incapacity.
Long-term savings: It provides financial security for members’ long-term requirements, such as a child’s education or elder care.
Is group life insurance term or whole?
Group life insurance is a kind of fixed-term life insurance that covers a group of individuals rather than a single individual, as the name indicates. Employers often utilise it to give death-in-service benefits to their employees. Typically, the employer pays the whole premium for group life insurance.
What happens to my group life insurance when I retire?
It is only valid as long as your employer renews the coverage and you continue to work for that company.
One disadvantage of these policy types is that they are group-based rather than individual-based.
Since group coverage is employment-based, it will terminate if you move jobs, stop working for an extended length of time, quit to start a company or retire.