Canada Life group life: how it works for UK employers
Canada Life group life is a workplace protection policy that pays a tax-free lump sum to an employee's family if the employee dies while working for you. We explain it and compare it with the rest of the market, at no extra cost to you.
Canada Life group life is one of the best-known group life insurance options in the UK, so employers often ask how it works, what it costs and whether it is the right choice for their team. This guide covers the cover, the trust arrangements, the support services and how a broker compares Canada Life with other insurers.
What is Canada Life group life insurance and how does it work?
Group life insurance, sometimes called group life assurance or death in service, is a single policy that covers all eligible employees under one contract. The employer pays the premium and the insurer pays a lump sum if an employee dies while employed. Canada Life UK is part of a Canadian-founded insurance group and sells group protection through brokers to UK employers of many sizes.
The benefit is normally a multiple of salary, so a higher earner is covered for more. The payment goes to the employee's family or other beneficiaries, usually through trustees. Because the policy belongs to the employer, cover normally ends when someone leaves the company, unless the scheme allows it to continue or the person converts to an individual policy.
Who can get Canada Life group life insurance and what does it cover?
Group life is aimed at employers, from a small company with a handful of staff to a large business. Eligible employees are covered once they join the scheme, and many policies include a free-cover limit that lets members join without individual medical questions. Anything above the limit may be underwritten.
The core cover is the death benefit, but employers can usually add extras. These can include cover for terminal illness, a benefit for dependants, and support services for employees. Canada Life has offered employee support such as a helpline and a wellbeing app alongside its group protection, including bereavement counselling and mental health support. The details of those services change, so check what is included in the current policy before you rely on them.
Death benefit
A lump sum, usually a multiple of salary.
Optional extras
Terminal illness and dependant benefits, where offered.
Employee support
Helpline and wellbeing services, subject to current terms.
How much does Canada Life group life insurance cost?
The cost depends on the number of employees, their ages and salaries, the multiple of salary you choose and the industry you work in. Group life is priced for the whole group, which is why the cost per head is normally low compared with the size of the benefit. A common choice is between two and four times salary, and the premium rises with the multiple.
Any price you read online is illustrative only. The real figure comes from a quote built on your headcount and payroll. Insurers also change their rates, so the cheapest insurer for your group this year may not be the cheapest next year. A broker compares the market for you and checks again at renewal, so you do not stay with an insurer out of habit.
Master trust or excepted group life policy: how does the trust work?
For the benefit to be tax-efficient, a group life policy is normally written under a discretionary trust. A registered or excepted group life arrangement lets the trustees decide who receives the payment, which usually keeps the money outside the employee's estate for inheritance tax and avoids delay waiting for probate. Employers can set up their own trust, or use a master trust provided by the insurer so that the structure is simpler to run.
Trustees consider the employee's nomination or expression of wish form, but they make the final decision. Keep those forms up to date, because a form that is years old can name the wrong person. The tax rules are detailed and change from time to time, so speak to an accountant for your own position.
How do you make a Canada Life group life claim?
The employer, or the scheme trustees, normally notify the insurer, then provide proof of death, the employee's salary and employment details. The insurer checks the claim against the policy and pays the lump sum to the trustees, who pay the beneficiaries. Families should speak first to the employer's HR team or the scheme administrator, because they hold the policy documents. Insurers publish claim forms and contact details on their websites.
When you buy through a broker, we help the employer with the paperwork and stay on hand if a claim is questioned, so the family is not left to chase an insurer during a difficult time.
Canada Life group life vs other insurers: which one should you choose?
Canada Life competes with Aviva, Legal and General, Zurich, Royal London and others. Each insurer differs on price, underwriting limits, optional benefits, trust arrangements and the support services offered to employees. The best fit depends on your group and what you want to offer your staff, not on the brand.
Comparing like for like is the only fair way to choose. We price the same salary multiple, the same free-cover limit and the same optional benefits across the market, then explain the differences in plain English. Using a broker costs you nothing extra, because the commission is already built into the premium.
Choosing one insurer by name
One quote, one set of terms, and no way to see what else was available.
Comparing the market
Like-for-like quotes on the same salary multiple, with support at renewal and at claim time.
Why use a broker for Canada Life group life insurance?
A broker saves you time and checks that the policy is set up properly: the right multiple of salary, the right trust, and a clear process for your employees. We also review the policy at renewal, because a premium can rise even when nothing about your group has changed. Many employers pair group life with group income protection and company health insurance, and we can price the whole benefits package together.
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This page is general information, not a personal recommendation. Policy terms, prices and tax rules change, so check the current documents before you decide.
Compare Canada Life group life with the market
Tell us how many employees you have and the salary multiple you want, and we will price group life across the market for you, at no extra cost.
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