Group Risk Products

Group Critical Illness:

Group Critical Illness (CI) cover pays a tax free lump sum to an employee on the diagnosis of one of a defined list of serious conditions or on undergoing one of a defined list of surgical procedures. There is usually a choice of base or core cover (which insures against some of the most serious critical illnesses) or base/core plus additional cover (which insures against a number of additional serious conditions too).

The benefit is paid once the employee has survived for a specified period (14, 28 or 30 days). Most insurers will also offer the option of a benefit for a covered employee who is assessed as being permanently and totally disabled but not otherwise able to claim for one of the conditions covered by the policy, in which case, the employee usually needs to have been permanently and totally disabled for more than 6 months.

Where cover is paid for by the employer corporation tax relief is given on the premiums, the employer is liable for Class 1A National Insurance contributions on the premiums and premiums are treated as a P11D benefit for employees.

Group CI is also increasingly being provided on a purely voluntary basis as part of a flexible benefits arrangement. In this case, the premium the employee pays does not qualify for tax relief.

Expert advice should always be taken when setting up a group insurance scheme to ensure optimum cover is provided and all tax efficiencies are maximised.