A Guide to Group Critical Illness Cover

If you’re a business owner looking to offer financial protection for your employees, group critical illness cover could offer them peace of mind in difficult times. Here we’ll cover how group critical illness cover works in the UK, what it includes, and how to get the best quotes with the lowest cost for your business.

What is group critical illness cover?

Group critical illness cover is a type of business insurance that provides a tax-free lump sum to an employee if they’re diagnosed with a serious illness covered by the policy. It’s often offered as part of a wider employee benefits package to help attract and retain talent.

The payout can be used by the employee however they choose, whether that’s to fund medical treatment, pay off debts, or cover living costs while they recover.

Although the payout is usually tax-free, employer-paid premiums are typically treated as a benefit-in-kind (BIK). So, the employee would pay tax on them, and you can't usually deduct them as a business expense, like you might with life cover or income protection.

How does it work?

Employers take out a policy that covers all eligible employees under one scheme. As the business owner, they choose the level of cover provided (usually a salary multiple or a fixed lump sum) and pay a monthly premium to keep the policy in place.

If an employee is diagnosed with a critical illness specified in the policy (like cancer, a heart attack or stroke), they can make a claim. If the claim is successful, they’ll get a one-off tax-free lump sum payout.

Like individual policies, group policies typically include a ‘survival period’ of around 10 to 14 days. The employee must wait for this to pass before the claim can be paid. After a successful claim, cover for that person usually ends.

What does it cover?

Each insurer will have a list of conditions covered, which can be in the range of 20 to 115, but most group critical illness policies include protection for:

• Cancer (depending on type and severity)

• Heart attack, heart failure, and cardiac arrest

• Stroke

• Major organ failure

• Multiple sclerosis (MS) and Parkinson’s disease

• Motor neurone disease (MND)

• Blindness or deafness

• Paralysis or loss of limbs

• Severe burns

• Traumatic brain injury

Coverage varies between providers, so it’s important to check the specific conditions listed in the policy. Some group policies also include optional children’s cover or an extended list of conditions, which may result in higher premiums.

Types of policies available

Although most group policies are similar in how they’re structured, there can be some slight variations, depending on what works best for your business:

Core group critical illness cover

This is the standard cover that provides basic protection against a core list of serious illnesses. It’s typically the most cost-effective option and covers major diagnoses for the likes of cancer, heart attack, and stroke.

Enhanced group critical illness cover

Enhanced or ‘additional’ policies cover a wider range of conditions and often include more benefits such as children’s cover or services like counselling and rehabilitation. These policies are more comprehensive but usually come with higher premiums.

Voluntary and flexible benefits cover

Some businesses offer critical illness cover as a voluntary benefit, which means employees can opt in and pay the premiums themselves. It provides more flexibility and allows employees to tailor the level of cover to their personal needs.

How insurers assess applications

Unlike individual policies, group critical illness cover doesn’t usually require medical underwriting for each employee, especially if the group is large enough. Here’s how insurers typically assess your application:

• Business size: Most insurers require a minimum of 3 to 10 employees to offer group cover. For larger businesses with at least 100 to 150 employees, you may have more options, such as voluntary and flexible cover.

• Average employee age: The average age of your workforce can influence premiums. A younger, healthier workforce typically results in lower costs, but not always.

• Industry sector: If your business operates in a higher-risk industry (for example, construction or offshore work), premiums may be higher due to the increased risk of injury or illness.

• Level of cover: Group critical illness policies that offer higher lump sum payouts or cover a broader range of conditions will usually be more expensive.

• Policy options: Adding optional benefits, such as children’s cover, more covered conditions, or access to private healthcare support, can increase the premiums.

Get a group critical illness cover quotes comparison

If you’re a business owner looking to set up group critical illness insurance for your firm, comparing quotes online can be time-consuming and complex. Most insurers will have varying requirements and offer different benefits and pricing models.

Speaking with an insurance adviser can save you time and money. Our advisers will recommend the most suitable group critical illness cover for your team, based on your budget, industry, and employee profiles.

If you’d like a free, no-obligation chat with an adviser specialising in group critical illness cover, you can get started here:

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Is group critical illness cover worth it?

Here’s why group critical illness cover can be a valuable addition to your employee benefits package:

• Attract and retain talent: Offering financial protection in the event of a serious illness can help reduce employee turnover and set your business apart when it comes to attracting and keeping the best employees.

• Boost staff wellbeing: Employees feel more secure knowing they have a financial safety net if they face a life-altering diagnosis.

• Affordable group rates: Premiums are generally lower than if employees purchased personal policies due to group discounts.

• Minimal admin: Most insurers make it easy to set up and manage group policies, especially for smaller businesses. Once you’re up and running, there’s not much to do and making a claim is down to the employees.

While personal critical illness cover can offer more tailored protection, group cover is often a more affordable and efficient way to provide financial support for your team.

How much does it cost?

Group critical illness pricing isn’t usually publicly available in the same way as individual quotes. Most group polices will, to some degree, be bespoke or tailored to a particular business.

However, here are some of the key areas that can impact the cost of group critical illness cover:

• Company size and sector (for SMEs with less than 250 employees, insurers may require minimum premiums).

• Employee age profile.

• Level of benefit (For example, a flat £40,000, or 3 times salary).

• Whether dependents or children are included.

• Underwriting approach (medical underwriting or guaranteed acceptance and free cover limits).

• Whether you bundle in other benefits like life insurance or group income protection.

• Sometimes you’ll get discounts if you already provide benefits like private medical care.

Best UK providers for group critical illness cover

The best insurance provider to use for group critical illness cover will depend on your company and the level of protection you want to offer, but here are some examples of popular UK providers:

• Aviva: With an Aviva group critical illness policy, it can pay up to 5 times an employee’s salary (£500,000 maximum), and no medical underwriting is needed (but pre-existing conditions are excluded). There’s also the option to add cover for partners and spouses, or access to a cancer drugs fund if the NHS won’t cover costs.

• Legal & General: There’s a 14-day survival period with Legal & General's group critical illness cover, and it pays up to 5 times an employee's salary (£500,000 maximum). There are 15 core conditions covered, but you can add a further 26 for an extra cost. Children’s cover is automatically included, protecting them until they turn 21.

• Canada Life: There are 12 core illnesses covered with Canada Life's group critical illness policy, and you can add 26 more for an additional fee. There’s also the option to add cover for the diagnosis of a second or subsequent cancer. Limited children’s cover is automatically included with policies.

If you want to get a better idea of the best UK group critical illness providers based on your company’s needs, it’s worth having a brief discussion with an insurance adviser to see what your options are.

Why choose Teito for your group critical illness cover?

Finding the best group critical illness cover isn’t always straightforward. Your business’ needs and budget will be unique, but expert support ensures you get protection that works for your company at a reasonable cost.

Our experienced advisers can find the most suitable and affordable critical illness cover for your employees, regardless of the size of your business and the level of protection you want to provide. They can do this because they know which insurers offer the best group critical illness cover for any type of company.

Here are some more of the reasons businesses choose us for their group critical illness cover:

• We can get tailored quotes for group critical illness cover

• Our advisers have 5-star ratings on leading review sites

• Your first chat is free, with no obligation to proceed

• Access to specialist insurers with exclusive deals for companies

Ready to take advantage of a free, no-obligation chat with an adviser specialising in group critical illness cover? Get started here.