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Group Critical Illness Cover

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Group Critical Illness Cover pays a lump sum benefit should a member of staff suffer a serious illness. The three most common conditions insurers pay out a claim for are cancer, heart attacks and strokes.

  • Most group schemes cover at least 12 core critical illness conditions, but cancer, heart attack and stroke represent up to 80% of claims.
  • The level of cover is usually set as a multiple of basic salary before tax, although fluctuating remuneration can be accommodated with some insurers.
  • It is common for the level of cover of 1 – 2 x basic salary, although some organisations provide higher levels of cover usually up to a maximum benefit of 5 x salary or £500,000.
  • Additional benefits often include an Employee Assistance Program and Best Doctors Service.

What Does Group Critical Illness Cover?

Group Critical Illness Insurance covers at least 11 major or critical illnesses, with the most common being:

  • Cancer
  • Heart attacks
  • Strokes
  • Kidney failure
  • Motor neurone disease
  • Parkinson’s disease
  • Alzheimer’s disease
  • Major organ transplant
  • Surgery to fit coronary artery bypass grafts
  • Creutzfeldt-Jakob Disease (CJD).

As well as these ‘core’ illnesses, you can opt for your policy to cover an additional 25 or so serious illnesses, which includes conditions such as:

  • Aplastic anaemia
  • Bacterial meningitis
  • Benign brain tumour
  • Permanent and irreversible blindness/deafness
  • Cardiomyopathy
  • Paralysis
  • Loss of limbs.

These will all be detailed in your policy documents.

Children of employees are typically covered for free up to the age of 18 for a set of specific child-related critical illnesses. You can also opt to include workers’ spouses and civil partners in Group Critical Illness Cover, but this will be at an additional cost.

Including Total Permanent Disability

Total and Permanent Disability is often an additional option on a plan and does not cover an illness per se but covers an employee should they be unable to work in their own occupation as a result of being made totally and permanently disabled. This might be through illness or injury.

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Why Provide Company Critical Illness Cover?

Cancer makes up the bulk of Group Critical Illness claims. According to Cancer Research UK, there were 359,960 new incidences of cancer in 2015 and someone is diagnosed with cancer every 2 minutes.

1 in 2 of us alive today born after 1960 will get cancer at some point in their lives.

Meanwhile, according to the British Heart Foundation:

  • 7 million people in the UK live with cardiovascular (heart and circulatory) disease
  • 3 million are living with coronary heart disease
  • 915,000 have survived a heart attack
  • Over 500,000 are suffering from heart failure
  • About 1.2 million people have survived a stroke.

It is important to recognise that not all instances of the above will result in a successful claim, as policies usually pay out on the occurrence of a condition at or above a set severity as defined in the policy’s terms.

However, the above statistics give you an idea of how widespread serious health problems are within the general population.

Benefits for Employers…

As well as providing cover for your employees against cancer, heart attack, strokes and a range of other serious illnesses, there are a number of benefits to getting cover.

Investors in People revealed…

  • Almost 1 in 5 UK employees are unhappy in their job due to a lack of benefits.
  • 44% of UK employees considered company benefits to be one of the most important qualities that attract them to a new company.

The Chartered Institute of Professional Development undertook a survey which found 54% of people currently looking for a new job are looking for better pay or benefits, citing this as the main reason for their move.

For employers, an employee Critical Illness Insurance scheme has the potential to improve the quality of the business.

An impressive employee benefits package can:

  • Attract new employees
  • Improve employee retention and engagement
  • Reduce stress and associated staff absenteeism.

Group Critical Illness Cover vs Income Protection

One other option to consider that may be more appropriate for your company and your employees is Group Income Protection.

Rather than paying out a cash lump sum in the event of an employee falling ill, Group Income Protection pays a proportion of the employee’s wages into the company should they be out of work, which you then distribute to the individual as a form of sick pay.

Company Critical Illness Insurance only covers a small number of very serious illnesses – the maximum illnesses covered by the market is fewer than 45. Group Income Protection, on the other hand, will cover your workers for anything that medically prevents them from doing their jobs.

How Much Does Group Critical Illness Cover Cost?

The cost of Company Critical Illness Insurance depends on a variety of factors, with the major ones being:

  • The age of your employees
    The older your workforce, the more likely they are to suffer a critical illness and so the more you will pay in premiums.
  • The number of employees covered
    The policy can be set up to cover certain groups of employees. For instance, you could choose to only cover management or certain levels of employees. You can also put a grading structure in place, so that more senior staff are covered for a higher multiple of salary.
  • The level of cover you opt for
    It’s typical to offer between 2-3 times an employee’s salary as a payout. The more you offer in cover, the more expensive your premiums will be.
  • ‘Additional’ critical illnesses covered
    If you opt for the extended list of critical illnesses to improved coverage, you will pay more in premiums.
Nadeem Farid Head of Employee Benefits at Drewberry

It’s very hard to provide estimates as to the cost of Group Critical Illness Cover because it depends largely on the data you provide on the employees you’re looking to cover.

If you need some help please do not hesitate to pop us a call on 02084327333 or email help@drewberry.co.uk.

Nadeem Farid
Head of Employee Benefits at Drewberry

Tax: Group Critical Illness, HMRC and Benefits In Kind

When you purchase a Group Critical Illness policy, it’s taxed differently from the Critical Illness Cover you’d take out as an individual because individual cover is paid for using income you’ve already had tax and National Insurance deducted from.

However, when an employer takes out this cover on behalf of its employees, Group Critical Illness Insurance is usually considered a business expense you can reclaim against corporation tax.

As well as the premiums being tax-deductible for your company, there’s no income tax on Critical Illness Insurance payouts for your employees, either.

As there’s no tax to pay on the premiums or the payout, it’s important to consider that, for your employees, generally Group Critical Illness Cover is a taxable benefit in kind (P11D benefit).

This means they’ll have to pay tax on the premiums you’re paying on their behalf.

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Common Group Critical Illness Insurance Questions

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    Best 5 UK Group Critical Illness Insurance Providers

    aviva

    Aviva

    • Maximum cover: The lower of £500,000 / 5 times salary
    • Minimum lives: 5
    • 15 critical illnesses are covered as standard with the option to add an additional 27 illnesses with Aviva’s extended cover
    • Children’s cover included as standard
    • Maximum policy cease age: 70
    • For an additional premium, employees can get access to a £100,000 cancer drugs fund for cancer drugs not available on the NHS. The policy also comes with a second medical opinion service via Aviva’s Best Doctors programme.
    canada life

    Canada Life

    • Maximum cover: £500,000
    • Minimum lives: 5
    • 13 critical Illnesses are covered as standard with the option to add cover for an additional 28 serious illnesses
    • Children’s cover included as standard
    • Maximum policy cease age: 70
    • Personal Nurse Service – a telephone-based service providing access to a qualified nurse
    • Second Medical Opinion – provides employees and their families with access to a second medical opinion if diagnosed as critically ill
    • Treatment Sourcing – Canada Life will find competitively-priced private healthcare (which will be at the employee’s expense).
    ellipse

    Ellipse

    • Maximum cover: The lower of £500,000 / 5 times salary
    • Minimum lives: 2
    • 12 critical Illnesses are covered as standard with the option to add additional cover for a further 29 serious illnesses
    • Children’s cover included as standard
    • Maximum policy cease age: 70
    • Comes with RedArc’s critical illness service, which includes a dedicated personal nurse adviser to help and support the employee while they are ill
    legal & general

    Legal & General

    • Maximum cover: The lower of £500,000 / 5 times salary
    • Minimum lives: 50
    • 15 critical Illnesses are covered as standard with the option to add additional cover for a further 26 serious illnesses
    • Children’s cover included as standard
    • Maximum policy cease age: 70
    • Includes access to Worklife Solutions, a 24 hour / 365 online / telephone service which offers counselling, legal representatives and nurses
    unum

    Unum

    • Maximum cover: The lower of £500,000 / 5 times salary
    • Minimum lives: 3
    • 11 critical Illnesses are covered as standard with the option to add cover for an additional 27 serious illnesses
    • Children’s cover included as standard
    • Maximum policy cease age: 70
    • Includes access to a specialist cancer support network that provides access to the services of Harley Street Concierge Ltd. Also available is Unum LifeWorks, an employee assistance programme offering employees access to a 24/7 helpline for advice on everyday issues such as debt and childcare.

    Get Expert Group Critical Illness Insurance Advice

    When it comes to employee benefits, including Group Critical Illness Cover, it’s time-consuming and often quite difficult to get cover by yourself. We are here to help make sure you compare the whole UK market and set-up the most appropriate cover at the most competitive premium.

    Why Speak to Us?

    We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

    • There is no fee for our service
    • We are independent and impartial
      Drewberry isn’t tied to any insurance company, so we can provide completely impartial advice to make sure you get the most appropriate policy based solely on your needs.
    • We’ve got bargaining power on our side
      This allows us to negotiate better premiums for you than you going direct yourself.
    • You’ll speak to a dedicated expert from start to finish
      You will speak to a named expert with a direct telephone and email. No more automated machines and no more being sent from pillar to post – you’ll have someone to speak to who knows you.
    • Benefit from our 5-star service
      We pride ourselves on providing a 5-star service, as can be seen from our 2454 and growing independent client reviews rating us at 4.92 / 5.
    • Benefit from the protection of regulated advice
      You are protected. Where we provide a regulated advice service we are responsible for the policy we set-up for you. Doing it yourself or going direct to an insurer won’t provide this protection, so you won’t benefit from these securities.
    • Claims support when you need it the most
      You have support should you need to make a claim. The most important thing when it comes to insurance is that claims are paid and quickly. We are here to support you during the claims process and make sure it’s as smooth and stress free as possible.
    • A personalised benefits page for your business
      We want to make it easy for your employees to access and use their benefits. Get a custom landing page containing your policy details, important documents and exclusive discounts 👍 – see example.
    Tom Conner Director at Drewberry

    If you are reviewing an existing scheme or looking to set-up a new policy we are in a great position to help.

    If you need help please don’t hesitate to pop us a call on 02084327333 or email help@drewberry.co.uk.

    Tom Conner
    Director at Drewberry

    Sam was very helpful and kept me informed at all times. Brilliant service.

    Paul Williams
    05/06/2019
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