Group critical illness cover, for the diagnosis nobody plans for
A tax-free lump sum to your employee on diagnosis, while they are still very much alive and dealing with it. We compare the market for you.
Book a 30-min business protection callOne in two people in the UK will be diagnosed with a serious illness like cancer, a heart attack or a stroke at some point in their lives. Group critical illness cover pays a tax-free lump sum to an employee if they are diagnosed with one of a defined list of critical illnesses, giving them financial breathing room at exactly the moment they need it most.
Below is how the cover works, what it costs, how it is taxed, and what to check before you commit to a scheme.
What is group critical illness cover?
Group critical illness cover is a policy an employer arranges to cover part or all of its workforce, paying a lump sum to an employee if they are diagnosed with one of a specified list of critical illnesses during the policy term. Unlike group life insurance, which pays out on death, group critical illness cover pays out while the employee is still alive, giving them money to cover treatment costs, adapt their home, pay off debt, or simply take time to recover without worrying about finances.
It is usually offered as a standalone employee benefit or bundled into a wider benefits package alongside other group protection.
How does group critical illness insurance work?
The employer takes out a single group critical illness insurance policy covering the whole workforce or a defined group of employees, and pays the premium, usually calculated per employee based on the size and age profile of the group. If an employee is diagnosed with one of the critical illnesses covered by the policy, they submit a claim, typically supported by medical evidence, and the insurer pays the agreed lump sum directly to the employee rather than the business.
Most policies also cover total permanent disability and, on some group critical illness policies, terminal illness as an additional trigger alongside the core list of critical illnesses.
What illnesses are covered by group critical illness insurance?
Every critical illness product sets out a defined list of critical illnesses it covers, and while the exact list varies by insurer, most cover the major conditions: cancer, heart attack, stroke, major organ transplant, kidney failure, bacterial meningitis and total permanent disability, among others. Some policies also cover a subsequent cancer diagnosis after an earlier claim, or benign tumour conditions that fall outside a strict cancer definition.
It is worth comparing exactly which critical illnesses each insurer's policy covers rather than assuming they are all identical, since the list can differ meaningfully between providers. A critical illness policy from one insurer might define stroke or heart attack slightly differently to another, which is exactly the kind of detail worth checking before you commit to a scheme.
How many critical illnesses does a typical group critical illness policy cover?
Most insurers structure a group critical illness policy around a core list of around 20 to 40 critical illnesses, ranging from the most common, cancer, heart attack and stroke, through to rarer conditions like bacterial meningitis or a major organ transplant. A longer list of critical illnesses generally means a more comprehensive policy, though the definitions used for each condition matter just as much as how many critical illnesses are named on the list.
How much does group critical illness insurance cost?
Premiums are usually quoted per employee and depend on the size of the group, the age profile of your workforce, the sum assured, the occupations involved and whether family cover is included. A young workforce on a modest multiple of salary costs a fraction of what an older group on a high sum assured will. Any figures quoted before the insurer has seen your employee data are illustrative only.
Group schemes are generally cheaper per head than the equivalent individual critical illness policies, because the insurer prices the group as a whole rather than underwriting each person separately.
Want a per-employee figure for your actual workforce rather than a generic range?
Get quotes comparedHow is group critical illness insurance taxed?
Premiums paid by the employer are normally treated as a benefit in kind for the employee, and are usually an allowable business expense for the company. The lump sum itself is generally paid to the employee free of income tax. Tax treatment depends on how the scheme is structured and on individual circumstances, so confirm the position with your accountant before you set the scheme up.
How to make a claim: group critical illness claims explained
To make a claim, an employee, or in a claims scheme set up through the employer the employer on their behalf, notifies the insurer of the diagnosis and provides supporting medical evidence. Group critical illness claims are usually assessed against the specific policy wording for that condition, since insurers define each of the critical illnesses precisely. A diagnosis has to meet the policy's definition, not just a general description, for the claim to be paid.
What is the difference between group critical illness, income protection and group life?
Group critical illness cover rarely stands alone. Most employers offering it also have group life insurance and increasingly group income protection in place, together forming a wider group protection package. The three address different points on the same risk.
Group life and group income protection
- Group life pays out on death, to the employee's family
- Group income protection replaces income during long-term illness
- Income protection pays monthly, for as long as the employee is off
- Neither pays anything on a diagnosis alone
Group critical illness cover
- Pays a lump sum on diagnosis of a covered condition
- Pays regardless of whether the employee can still work
- Money goes to the employee to use however they need
- Sits alongside the other two rather than replacing them
Wellbeing services and health and wellbeing support included
Most group critical illness policies now bundle in wellbeing services as standard: virtual GP access, an employee assistance programme, and sometimes physiotherapy or nutritional advice, all designed to support health and wellbeing day-to-day rather than only at the point of a serious diagnosis.
Beyond the lump sum itself, many policies include access to a second medical opinion service, cancer support nurses, or mental health support for employees processing a serious diagnosis, and sometimes for their family too. For many employers, these wellbeing services are what make the policy feel like genuine value throughout the year, not just protection sitting unused in the background.
Does group critical illness insurance include children's cover?
Some group critical illness policies extend to family cover, insuring an employee's spouse or partner and children against the same list of critical illnesses, sometimes at a reduced sum assured for children. This turns the policy into genuine protection for employees and their families, not just the individual on the company payroll, and it is a meaningful point of difference when comparing schemes, since not every insurer offers it as standard.
Flexible benefits: adding group critical illness cover to your package
Many employers offer group critical illness cover as part of a flexible benefits scheme, letting employees choose their own level of cover, or add cover for a partner or children, alongside other flexible benefits like private medical insurance or dental cover. This approach lets a business offer a genuinely useful benefit without mandating a one-size-fits-all level of cover that does not suit every employee's circumstances.
What are the benefits of group critical illness cover for employers and employees?
When employees diagnosed with a critical illness need to claim, the process usually starts with a conversation with the insurer or a claims specialist, followed by medical evidence confirming the diagnosis meets the policy's definition for that specific condition.
Money at the worst moment
A lump sum on diagnosis means treatment costs, home adaptations or a mortgage payment are not the first thing the employee has to worry about.
Support beyond the payout
Rehabilitation, counselling, workplace adjustments, and sometimes a dedicated case manager who coordinates a return to work if and when they are ready.
Genuine peace of mind
Knowing a diagnosis would not also mean immediate financial hardship, even for the employees who never need to claim.
Recruitment and retention
A visible, tangible way of showing staff the business has thought about what happens if the worst occurs.
Cheaper than individual cover
The insurer prices the group as a whole rather than underwriting each person separately, so the cost per head is usually lower.
Simple to administer
One policy, one renewal, one point of contact, rather than a scattering of individual arrangements to keep track of.
Which company offers the best group critical illness cover in the UK?
There is no single best provider for every business. An adviser's role is to compare group critical illness cover across the market against your workforce's actual needs: the size of your team, their age profile, and whether family cover or a flexible benefits structure makes sense for your business, so employees get genuine financial support if the worst happens.
Montgomery Financial works through this with every employer before recommending a specific scheme, rather than defaulting to whichever provider is quickest to quote, and will talk you through the policy's terms and conditions in plain English before you sign anything.
Group critical illness cover questions, answered
Is it worth paying for critical illness cover?
For most employers, yes. Given how common a diagnosis of one of the major critical illnesses is over a working lifetime, the lump sum provides genuine financial protection at a relatively modest cost per employee.
What are the 36 critical illnesses?
There is no fixed list of 36. Insurers each publish their own list, typically 20 to 40 conditions, always including cancer, heart attack and stroke, with the rest varying between providers.
What are the main critical illnesses covered?
Most policies cover cancer, heart attack, stroke, major organ transplant, kidney failure and total permanent disability as standard, though the full list of critical illnesses varies by insurer.
Does group critical illness cover include children's cover?
Some policies offer family cover extending to a partner and children, though this varies by insurer and is not included as standard on every scheme.
Can employees increase their own level of cover?
On a flexible benefits scheme, often yes. Employees can usually top up the core level of cover, sometimes subject to medical underwriting above a set limit.
Do employees need a medical to join the scheme?
Usually not up to a free cover limit set by the insurer. Above that limit, or for a voluntary top-up, medical underwriting may apply.
Let's get your team covered properly
Whether you are introducing group critical illness cover for the first time or reviewing an existing scheme, we will compare cover across the market, help you decide on family cover and flexible benefits options, and explain the whole thing in plain English. Thirty minutes, on Zoom, no charge.
Book a 30-min business protection callGeneral information, not a personal recommendation. Tax treatment depends on individual circumstances and may change.