02/03/2021

7 mins

All the best Group Life Insurance companies pay out a lump sum if an employee dies while working for you. The employee can leave this to any individual or charity they want. The payout is usually a multiple of an employee’s earnings, but can also be a fixed lump sum.

While the underlying Group Life Insurance cover is very much the same, every insurer approaches it differently.

Each UK Group Life Insurance provider is therefore distinct from each other. This is especially true when it comes to additional benefits and minimum / maximum coverage thresholds.

In this guide, we look at what makes a good Group Life Insurance provider by examining the nuts and bolts behind their policies. This lets you can compare each insurer to find the best one for your business.

CLIENT SUCCESS STORY 🥳
As a pensions advice firm, Profile Pensions understood the importance of financial security. That’s why they introduced Group Life Insurance to protect workers’ families should the worst happen. Check out their story here ⟶

What Makes a Good Group Life Insurance Company?

Here are some key points to consider when comparing Group Life Insurance:

Maximum Benefit

As mentioned, the payout from Group Life Insurance is typically a multiple of an employee’s earnings or a fixed lump sum.

However, some insurers have smaller maximum payout limits per employee (either as a maximum multiple of earnings or a maximum fixed benefit) than others.

This can vary from 8 times earnings to 20 times earnings. If you want to offer larger benefits to employees, it’s important to choose an insurer which can offer this.

Minimum Number of Employees

Some insurers have a higher minimum threshold for entry in terms of number of employees. While often as low as between three staff, it can be as high as ten employees or more before an insurer will cover you.

The best Group Life Insurance companies for small businesses can therefore be very different from the best companies for larger groups.

Free Cover Limit

The free cover limit is the benefit each employee can have before the insurer requires medical underwriting (answering questions about their health and pre-existing conditions).

With most UK Group Life Insurance companies, few medically underwrite the majority of employees because free cover limits are usually relatively high.

As a result, hardly any staff need to answer medical questions before the insurer will cover them. It therefore rarely costs more to insure employees with medical conditions than is the case for healthy workers.

It’s only the highest-paid workers or those you want to offer a particularly high benefit to who usually need underwriting.

If you have many high-earning workers or want to offer particularly high payouts, the best Group Life Insurance companies for you will likely be different than for businesses which only want to offer a smaller benefit.

Master Trust Availability

In the event of a claim, the insurer first pays the benefit into a trust (which you set up at the same time you arrange the policy). The trust then pays the funds to the individual / charity the employee requested when you arranged the plan.

Having a trust between the insurer and the insured employee is vital to shield the benefit from tax. As the payout doesn’t become part of the deceased employee’s estate, it avoids inheritance tax.

Which Type of Group Life Insurance Trust Should I Use?

There are two options for Group Life Insurance trusts: The insurer’s master trust or you can create your own.

A master trust is the less bespoke option. However, the insurer takes care of the administration and management, including reporting to HMRC.

On the other hand, you can create your own trust for greater flexibility. However, you must administer it and take charge of reporting to HMRC. You might also need to pay for legal advice to set it up.

For simple convenience, many of our clients therefore prefer the master trust option where available.

More on which type of Group Life Insurance trust might be best for you here ⟶

Additional Benefits / Employee Assistance Programmes

Perhaps one of the biggest areas insurers differentiate themselves is in the additional benefits they provide.

Some insurers only offer a very basic set of services, while others include a range of benefits that are hugely valuable on top of the core insurance. These include:

24 / 7 remote GP service
Bereavement support, either with counselling or a telephone helpline
Probate support for an employee’s family to help with administering the estate of the deceased
Second medical opinion service, offering consultations with leading experts if an employee is diagnosed with a medical condition
Advice in areas such as finance, budgeting, legal matters, relationships etc.

Comparison of the Best UK Group Life Insurance Companies 2024

AIG
Maximum Benefit	20 x salary or any fixed benefit
Minimum Number of Employees	3
Free Cover Limit	£1.25 million
Master Trust?	✅
Additional Benefits / Employee Assistance Programme
AIG’s main additional benefits offering / employee assistance programme is Smart Health. This offers employees, their partner and their children up to age 21 these benefits: 24 / 7 / 365 virtual GP appointments — read our director’s experience of it here ⟶ Tailored 4 and 8 week fitness regimes, as well as nutrition plans from trained nutritionists Access to counsellors to provide you with tailored therapy sessions for help dealing with stress, anxiety and depression An annual health check / screening via a simple pinprick blood test A second medical opinion service from Best Doctors after you’ve been diagnosed with an illness to provide more information about it or offer an alternative diagnosis / treatment plan if appropriate.
The Drewberry Verdict
👍	Smart Health is an excellent additional benefits programme, one of the best available on the market
👍	High multiple of earnings (20x) available
❌	Free cover limit is at the lower end of the scale compared to other insurers
Aviva
Maximum Benefit	10 x salary or any fixed benefit
Minimum Number of Employees	3
Free Cover Limit	Dependent on your group
Master Trust?	✅
Additional Benefits / Employee Assistance Programme
Aviva’s additional benefits focus on helping an employees’ family and their colleagues cope with the death of an insured individual. This includes: Helpline for access to bereavement counselling Grief Encounter, a helpline to a registered charity specialising in helping people with grief Stress helpline for those suffering stress and anxiety.
The Drewberry Verdict
👍	Aviva paid more than £227m in Group Life claims for UK employees in 2019
❌	Fairly limited additional benefits compared to other providers
❌	Maximum multiple of salary available is 10 times earnings. This is lower than many other insurers.
❌	No fixed free cover limit; Aviva decides this on a case-by-case basis. This can make it hard to know at a glance whether it will be enough for your company’s higher earners.
Canada Life
Maximum Benefit	10 x salary or a fixed benefit of a maximum of 10 x salary
Minimum Number of Employees	5
Free Cover Limit	£1.25 million
Master Trust?	✅
Additional Benefits / Employee Assistance Programme
The main additional benefits offering from Canada Life is WeCare. This offers: 24 / 7 remote GP service Diet and exercise plans from expert nutritionists Up to 10 sessions of mental health support Financial and legal support in areas such as budgeting or managing a divorce Second medical opinion on a recent diagnosis Also available are: A probate helpline to assist employees / their families with will writing, estate administration, applying for probate and to offer guidance and advice on legal matters linked to a death A bereavement helpline for the colleagues of a deceased employee and their immediate family.
The Drewberry Verdict
👍	WeCare makes Canada Life one of the best Group Life Insurance companies in terms of additional benefits
❌	Maximum benefit of 10 x salary or a lump sum not exceeding 10 x salary is on the low side compared to other insurers
Legal & General
Maximum Benefit	Any multiple of salary or lump sum not in excess of £10 million
Minimum Number of Lives	10
Free Cover Limit	£1.8 million
Master Trust?	✅
Additional Benefits / Employee Assistance Programme
Health Assured is Legal & General’s main additional benefits service. It offers employees, their partner and children aged 16-24 who are in full-time education and live in the same residence as the employee these benefits: 24 / 7 telephone helpline for support with emotional and practical problems, medical concerns, legal enquiries and crisis intervention Online access to cognitive behavioural therapy, trauma courses, video counselling and email addresses for trained counsellors Access to mini health checks, mood trackers, health and fitness trackers and certain perks and discounts Up to eight face-to-face bereavement counselling sessions for the family of a deceased employee Advice on tax and probate issues for the family if an employee passes away
The Drewberry Verdict
👍	High maximum payout of £10 million
👍	One of the highest free cover limits available
👍	Legal & General paid 98.4% of Group Life Insurance claims in 2019, totalling £232 million
❌	You must be insuring at least 10 employees to be eligible. Many other insurers cover companies with 3+ staff.
❌	While Legal & General offers a fairly good range of additional benefits, it still provides fewer than other insurers. It doesn’t, for instance, offer a remote GP service.
MetLife
Maximum Benefit	8 x salary
Minimum Number of Lives	3
Free Cover Limit	Dependent on your group
Master Trust?	✅
Additional Benefits / Employee Assistance Programme
Bereavement support — up to six face-to face counselling sessions per year after an employee passes away Probate support — help from legal counsellors for an employee’s family on practical issues relating to the employee’s death, such as registering a death, closing bank accounts and managing the estate Employee assistance program — for groups of fewer than 300 workers, MetLife’s EAP includes a telephone support line for help with physical, emotional and financial wellbeing
The Drewberry Verdict
👍	MetLife has a 96% customer satisfaction rating
❌	Limited additional benefits compared to other insurers
❌	Lower maximum benefit as a multiple of salary than most other insurers
Unum
Maximum Benefit	12 x salary or any fixed benefit up to £15 million
Minimum Number of Lives	3
Free Cover Limit	£1.75 million
Master Trust?	✅
Additional Benefits / Employee Assistance Programme
Unum’s employee assistance programme includes: Online bereavement resources Eight digital models based on cognitive behavioural therapy (CBT) techniques to help with issues such as anxiety and relationships Total Wellbeing Index — personal mental, physical, financial and social assessments for employees, plus tools and resources to support them in areas they need to focus on. Meanwhile, employers get access to a telephone legal helpline which can advise on employment and commercial law, HR disputes, health and safety legislation, tax and intellectual property.
The Drewberry Verdict
👍	No requirement for employee to be ‘actively at work’ to get coverage for schemes of at least 100 workers
👍	Additional benefits for employers as well as employees
👍	High maximum benefit available
❌	Additional benefits for employees are limited

How to Choose the Best Group Life Insurer for Your Company

Group Life Insurance is perhaps the simplest employee benefit to arrange. It’s also one of the cheapest available and is highly popular among employees. All this means it’s therefore typically one of the first benefits employers introduce for their workforce.

However, given it’s usually among the first employee benefits companies offer staff, companies may be less familiar with benefits and the way they work if they’ve never offered them before. That’s where it pays to have an expert in your corner, such as one of the team at Drewberry.

Why Speak to Us?

We started Drewberry™ because we were tired of being treated like a number.

We all deserve a first class service 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.

We are award winning 🏆 independent insurance advisers who work with all the leading UK insurers
You’ll speak to a dedicated expert from start to finish
We are very proud of the 3900 and growing independent client reviews rating us at 4.92 / 5
We are authorised and regulated by the Financial Conduct Authority. You can find us on the financial services register here 🧐
Claims support when you need it most.

For help and fee-free advice on every aspect of employee benefits, don’t hesitate to pop us a call. We’re here on 02084327333 — or you can email help@drewberry.co.uk.