Group Life Insurance

Protecting employees’ families and enhancing benefits to support financial security.

No instant quotes — we’ll guide you to the right cover for your needs.

What is

group life insurance?

Group Life Insurance, often known as 'Death in Service' cover, is an employee benefit designed to provide financial security to an employee's family if they were to pass away.

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The policy pays out a tax-free lump sum to the employee's chosen beneficiaries, helping them cope financially during an incredibly difficult time.

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It is a highly valued, foundational benefit that shows a company's commitment to its team and their loved ones.

Why might you need group life insurance?

Offering Group Life Insurance is one of the most powerful ways to show your employees you care.

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It provides your team with significant peace of mind, knowing that their families are financially protected should the worst happen.

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For a business, it is a surprisingly affordable yet high-impact benefit that fosters immense loyalty and goodwill. In a competitive market, it is a cornerstone of a benefits package that helps to attract and retain the very best talent.

How does Group Life Insurance work in the UK?

A business sets up a single Group Life Insurance policy to cover all eligible employees. The company pays the premiums, and if a covered employee dies, the policy pays out a lump sum.

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This payout is typically calculated as a multiple of the employee's annual salary and is paid to their nominated beneficiaries.

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In the UK, these policies are almost always set up using a trust to ensure the process is as smooth and tax-efficient as possible.

How Cover is Calculated

The most common method for calculating the payout is as a multiple of an employee's salary.

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A typical level of cover is between 2x and 4x an employee's annual salary.

For example, an employee earning £40,000 with 4x cover would provide a £160,000 payout.

Some schemes offer a fixed lump sum for all employees, regardless of their individual salary.

The Importance of a Trust

Group Life Insurance policies are written into a discretionary trust. This is a crucial feature with two main advantages:

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The lump sum payout is typically free from Inheritance Tax.

The money is paid directly to the beneficiaries quickly, without having to wait for probate to be granted.

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👉 At Health Cheque, we handle the entire process, including setting up the trust, to ensure your scheme is structured correctly from day one.

Benefits of

Group Life Insurance

Group life cover, often known as death-in-service benefit, gives employees reassurance that their families will be financially protected. It’s a simple, affordable way for businesses to enhance their benefits offering.

Often Includes Bereavement Counselling

Many providers include access to bereavement counselling and probate support services for the employee's family, offering practical help when it's needed most.

Flexible Cover Levels

Policies are typically structured as a multiple of the employee's salary (e.g., 4x salary), providing a meaningful payout that is easy to calculate and understand.

A Key Part of a Competitive Benefits Package

Also known as 'Death in Service' cover, this is a highly valued benefit that helps you attract and retain high-calibre staff in a competitive market.

Boosts Morale & Shows You Care

Offering Group Life Insurance demonstrates a deep commitment to the welfare of your employees and their families, fostering loyalty and a positive company culture.

Cost-Effective & Easy to Set Up

Group policies are a very affordable way to provide a significant level of cover. They are often set up without the need for individual employee medical exams.

Support Your Employees' Families

Provide a tax-free lump sum to an employee’s family if they die while in your service, offering vital financial security during a difficult time.

What does

Group Life Insurance

cover?

Provide lasting support for your team's loved ones.

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Group Life Insurance is designed to pay out a tax-free lump sum if an employee dies while they are covered by the policy. A key feature is that the cover is not just work-related; it protects the employee 24 hours a day, 7 days a week, anywhere in the world.

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The payout helps beneficiaries manage major financial commitments, such as clearing a mortgage, covering future living costs, or paying for education. Many policies also include access to bereavement support and probate helplines, providing practical assistance when it is most needed.

Extending Cover with a Dependants' Pension

For businesses wanting to offer an even higher level of support, some Group Life schemes can be enhanced with a Dependants' Pension. Instead of just a single lump sum, this option provides a regular, ongoing income to the employee's surviving dependents for a set number of years. This can be an invaluable benefit for employees with young families, providing long-term financial stability.

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A Dependants' Pension can help cover:

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Ongoing household bills and living expenses.

Childcare and school fees.

Long-term financial planning for the surviving spouse or partner.

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What isn't covered by

Group Life Insurance

?

Understand the limitations to ensure your team is protected.

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Group Life Insurance has one of the highest claim payout rates of any insurance product, but there are a few specific circumstances where a claim would not be paid. These are typically straightforward and related to the terms of employment.

Common Group Life Insurance Exclusions:

Employee Leaves the Company - The cover is a benefit of employment and ceases as soon as the employee is no longer on the payroll.

Policy Terms Not Met - Claims could be affected if the information provided about the employee group (e.g., salaries, roles) is inaccurate.

Breach of Trust Rules - The scheme must be administered according to the rules of the trust for a claim to be paid correctly.

Non-Designated Beneficiaries - Employees should be encouraged to complete a nomination form to ensure the trustees know who they want the benefit paid to.

In 2024, over 99% of group life insurance claims were paid, providing vital financial support to thousands of families across the UK. It's essential for employers to keep employee data up to date and encourage staff to nominate their beneficiaries.

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Need clarity on setting up a trust or a specific situation? Speak to our team for expert, impartial guidance.

Looking for

Group Life Insurance

cover here in the UK?

Group Life Insurance is a cornerstone of corporate responsibility and a fundamental part of a competitive benefits package. At Health Cheque, we provide independent advice on 'Death in Service' schemes, helping UK businesses find the right policy to protect their employees and their families.

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Whether your business is in London, Manchester, Birmingham, Leeds, or anywhere nationwide, our expert advisers simplify the process of setting up a scheme, including all trust documentation, to give you and your team complete peace of mind.

Why businesses choose Health Cheque for group life insurance

Independent advice — we search the whole market to find the right cover

Over 28 years’ experience supporting UK businesses and their teams

Trust setup included — we handle all the legal and trust documentation

Affordable premiums — compare the UK’s top insurers side by side

Simple, clear explanations — no jargon, just straightforward advice

Ongoing support — guidance for you and your employees at every stage

Get in touch with us or Book a consultation to compare policies

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Decades of trusted experience in private health insurance

Since day one, our mission at Health Cheque has been to provide honest, experienced advice in a space that can often feel overwhelming. As a fully independent broker, we focus on simplifying your options, comparing leading providers, and delivering health cover solutions you can rely on—now and into the future.

Martin Matthews

Senior Account Manager