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Group Critical Illness

Group critical illness is the fastest growing group risk benefit and can be used to supplement sick pay and private medical insurance.

What is Group Critical Illness?

Group critical illness is a policy taken out by an employer to pay a tax free lump sum to an employee if they are diagnosed with a serious medical condition or they undergo a defined surgical procedure. A claim will be considered once the employee has survived for a specified period and been diagnosed with or suffered one of the conditions covered by the policy.

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 critical illness is 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.

Some facts and figures

The group risk market insures 658,364 people for benefits totalling £46.47 billion – Swiss Re Group Watch 2021.

The group risk industry paid out £91.6 million in critical illness benefits to 1,304 people during 2020 – GRiD 2021 Claims Survey.

The average claim was £70,274 and the main causes for claim were cancer (67%) and heart attack (9%) – GRiD 2021 Claims Survey.

A group critical illness policy will often include some extra support services designed to help employers and employees alike on a daily basis – even if a claim is never made.

In total, there were 138,222 interactions during 2020 with the additional help and support services that are funded by group risk insurers, giving daily value to employers regardless of whether or not a claim was made under their policy – GRiD 2021 Claims Survey.

Expert advice should always be taken when setting up or reviewing a group risk insurance scheme to ensure that optimum cover is provided, any extra support services offered alongside the policy are used and all tax efficiencies are maximised.

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group risk

Group Life Assurance

Group Life Assurance

Provides a benefit on an employee’s death

Represents 40% of all insured life cover in the UK

Tax free lump sum up to Lifetime Allowance

Taxable dependants’ pension

Benefits over Lifetime Allowance through “excepted” route

Group Income Protection

Group Income Protection

Provides a continuing income during employee’s absence for illness, injury or disability

Represents 80% of all insured income protection cover in the UK

Used to cover employer’s promise of long term sick pay

Paid through payroll in normal way

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If you are active in the group risk market and would be interested in gaining a greater share of voice and working more closely with your contemporaries in the industry please get in touch by completing this page.

Benefits of membership:



The opportunity to influence group risk policymaking.



GRiD is a respected voice in the protection sector – as such, membership enhances the status of member organisations.



Privileged access to output from the various working groups, including consultation responses, regulatory updates, employer research and pan industry claims data. GRiD members also gain exclusive access to industry speakers at member meetings.

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