Home  >  News & Insight  >  Supporting employees in the event of a serious illness – Group Critical Illness

Supporting employees in the event of a serious illness – Group Critical Illness

What is Group Critical Illness cover?

Group Critical Illness provides employees with the financial safety net of a tax-free lump sum payment should they become critically ill.

It affords employees peace of mind knowing that, should a life changing diagnosis be given, they will not suffer financially, and they can focus on getting better without worrying about household or medical bills.  The money does not have to be paid back if the person gets well again.

The potential impacts of a critical illness are endless, but the most common include:

  • Reduced salary if unable to work
  • Necessary home changes to accommodate the illness
  • Medical bills for private care
  • Additional expenses when dealing with the impact of a diagnosis

As an employer, by investing in company Critical Illness Cover, you can offer protection and support to your employees.

Critical Illness Cover also benefits employers

Employers who are seen to care about their employees are better placed to retain the best employees. By making employees feel valued, you encourage loyalty, and employees are more likely to care about the productivity of the company as a whole.

As well as building trust with your current employees, offering company Critical Illness Cover can help you appeal to outstanding talent in your industry.

Many businesses that offer Group Critical Illness cover to employees do so voluntarily, meaning staff pay their own individual premiums. As a business, taking this cost on yourself is a great way to show yourself as an employer who cares about their workforce and ensure that the best individuals make up your workforce.

How much will Group Critical Illness cost?

In deciding your premiums, insurers will consider several factors based on your company’s workforce such as the average age of the employees on your payroll. They will also identify which members are above a certain age and consider the risk they pose as a consequence.

The cost of Group Critical Illness can vary hugely in cost depending on the level of cover you choose.

Are there any tax implications?

If the policy is taken out and paid for by the company to cover their staff, tax relief is given on the premiums. The employer will be liable for national insurance contributions on the premiums and the premiums are also treated as a P11D benefit for employees.

Whilst this is a Benefit in Kind, in the event that an employee needs to make a claim, the amount of Benefit in Kind is likely to be far outweighed by the actual benefit of having the policy in place – which could amount to hundreds of thousands of pounds.

In the event of a claim, the compensation paid directly to the employee will be a tax-free lump sum for them to spend how they see fit.

Critical illness cover can be complicated and expensive, and one size certainly does not fit all as far as cover is concerned. Get in touch if you would like advice in this area.


This is a financial promotion.

Wealth Management
Posted by Stacey Cole
12th May, 2021
Get in touch with Stacey Cole