What is group life insurance?

The main reason you might consider taking out group life insurance for your employees is the financial support their loved ones will receive. Depending on the provider you choose, they could also get access to support during bereavement as well as for their mental health. 

There's benefits for you as the employer, too. Offering group life insurance could enhance your benefits package and make your company more attractive to work for.

Group life cover is usually set up as either a registered or excepted policy.

Other factors you might consider when setting up a group life scheme are:

• how the policy pays out – as a lump sum or death in service pension.
• whether you fund the policy, or the employee pays monthly premiums.
• the claims process of your chosen provider.

The cost of your group life cover depends on your insurance provider and how many employees you’re providing it for.

At Aviva, we base your quote on the demographics of your workforce. We consider gender, age, salaries, occupations and where your employees live and work.

Depending on how the scheme is set up, payouts aren’t always subject to inheritance tax. And under current UK tax laws, your premiums usually qualify as an allowable business expense.

All references to taxation are based on our understanding of current tax law and practices. Tax law and practices could change in the future. You should get professional advice from your own tax advisers.

Usually, you’ll set the criteria your employees need to meet to receive your group life cover. It can include things like minimum and maximum ages, or whether they've passed their employment probation period. Your provider might have a waiting period, which is how long a scheme is set up before you can make a claim. 

There’s normally a maximum age limit for group life cover, and the total benefit might be capped, too. This is different with each provider, so it’s worth looking into the different options available to you.

Clear communication is really important across your whole benefits package. As their employer, it’s your responsibility to let them know what’s included and how everything works. Group life cover doesn't automatically replace any individual cover your employees already have.

Group life insurance is a valuable benefit to offer your employees. It makes sure your employee’s loved ones are supported financially and emotionally. We always recommend considering your options with a qualified financial adviser before taking out a policy with us or another provider.