What are group schemes?
Group schemes are insurance policies that an employer takes out to protect its staff. Instead of each person arranging their own cover, one policy covers your whole team, or a defined group such as all permanent employees. They're one of the most valued employee benefits around, and they're no longer just for big corporates - many insurers offer group cover for businesses with only a handful of staff.
Because the risk is spread across a group, cover is often simpler to arrange than individual policies. Up to a set limit, most employees can usually be covered without filling in detailed medical questionnaires. Key aspects include:
- The employer owns the scheme and pays the premiums;
- Cover is usually linked to salary, so it grows as your team and their pay grow;
- Most schemes include extra support services for staff, such as counselling, virtual GP appointments or rehabilitation;
- You can choose one type of cover or combine several to build a benefits package.
This is where Cleerly can help. Call us on 02394 212912 or request a callback and we'll help you build the right package for your team.
The main types of group cover
Group life insurance (Death in Service)
Pays a lump sum to an employee's family if they die while employed by you - usually a multiple of their salary, such as two, three or four times. The payout is normally made through a trust, so it can reach the family quickly. Many schemes also include bereavement and wellbeing support.
Group income protection
Pays a proportion of an employee's salary if they're off work long-term through illness or injury, once an agreed waiting period (often 13, 26 or 52 weeks) has passed. The benefit is paid to you as the employer, and you pass it on through payroll. Most insurers also offer early intervention and rehabilitation services, such as physiotherapy or mental health support, to help people get back to work sooner.
Group critical illness cover
Pays a tax-free lump sum to an employee if they're diagnosed with a serious illness covered by the policy, such as certain cancers, a heart attack or a stroke. Some schemes can be extended to cover employees' partners and children.
Group private medical insurance
Gives employees faster access to private diagnosis and treatment for eligible conditions, helping them avoid long waiting lists and get back to full health sooner. Many policies include extras such as digital GP services and mental health support.
Expert Commentary
"Smaller employers are often surprised at how affordable group cover can be, and how much their team values it. A well-designed scheme helps you attract and keep good people, and the support services can make a real difference long before anyone needs to claim."
Feeling inspired?
Want to offer your team benefits that really make a difference? We'll help you build the right package.
Whether you're ready to get the ball rolling or you'd just like some friendly, no-obligation advice, give us a call on 02394 212912 or complete the form below and one of our protection specialists will be in touch.
Group schemes and tax
The tax treatment depends on the type of cover and how the scheme is set up. As a general guide:
- Group life - premiums are normally an allowable business expense and not a taxable benefit for employees. Payouts are normally tax-free to the family, through a trust;
- Group income protection - premiums are normally an allowable business expense and not a taxable benefit. Benefits are paid through payroll and taxed like normal pay;
- Group critical illness - premiums are normally an allowable business expense, but usually count as a taxable benefit in kind for employees. Payouts are normally tax-free;
- Group private medical - premiums are normally an allowable business expense, but usually count as a taxable benefit in kind for employees.
Tax treatment depends on your circumstances and can change, so please check the position with your accountant or payroll provider.
Group schemes FAQs
It depends on the insurer and the type of cover. Some insurers will cover as few as two or three employees, while others have higher minimums. We can tell you what is available for a business of your size.
Usually not, up to the free cover limit. Above that level, the insurer may ask some employees for health information before covering the full amount. We'll explain how this works for your scheme.
Yes, within reason. Schemes are usually set up for a defined group, such as all permanent employees or all staff in a particular role or grade. The group needs to be clearly defined, and you can't simply pick and choose individuals.
Their cover normally ends when they leave your employment, and new joiners are added as they become eligible. Some schemes allow leavers to continue with cover on a personal basis.
Absolutely. Many employers combine group life with income protection, critical illness or private medical cover to build a fuller package. We can help you prioritise if budget is a factor.
They do a similar job, but group life covers a group of employees under one policy, while relevant life cover is an individual policy for one person. Relevant life cover is often used by small companies that don't have enough staff for a group scheme.
Important information: Group schemes are subject to the insurer's eligibility criteria, underwriting, policy definitions, terms, conditions and exclusions. Cover amounts above the free cover limit may require medical information. No benefit is paid during an income protection deferred period. Group schemes have no cash-in value, and cover ends if premiums are not paid. Tax treatment depends on individual circumstances and may change in the future. Cleerly does not provide tax or legal advice - please speak to your accountant or a tax specialist.
Our other protection products
Business and personal protection, explained clearly
From protecting your business to looking after your family, our specialists can help you find cover that fits.