Group life cover, also called risk benefits or group risk, is insurance an employer arranges on behalf of its staff as a group - typically life cover, disability cover and sometimes dread-disease cover - usually cheaper than equivalent individual cover because it is underwritten across the whole group.
What it means
Cover is often linked to a multiple of salary, so the benefit scales automatically as pay changes, and premiums can be funded by the employer, the employee through a payroll deduction, or split between the two depending on the scheme design.
Where it fits in
Where the employer pays the premium, it can create a fringe benefit for PAYE purposes depending on the structure, and where the employee pays, the premium is deducted through payroll like any other voluntary deduction.
Key rules
- Group life, disability and dread-disease cover arranged by the employer.
- Often linked to a multiple of salary, scaling automatically with pay.
- Employer-paid premiums can create a fringe benefit; employee-paid premiums are a payroll deduction.
- Cheaper per person than equivalent individual cover due to group underwriting.
