If your business wants to help protect the income and financial well-being of employees and their families in the face of death, injury, serious illness, or long-term absence, group risk insurance could offer a solution.
Here, we’ll explain what group risk insurance is, when you might need specialist cover, the types of products available, the benefits, and how to arrange a policy that fits your company’s needs.
What is group risk insurance?
It’s a collective policy taken out by employers to provide financial protection to employees and their dependents. Sometimes it’s called group protection. Rather than each person buying individual policies, the employer arranges benefits under one overarching policy.
Because it's offered by employers, group risk tends to be more cost-efficient, easier to access, simpler to manage, and sometimes at no direct cost to employees. Employers often use group risk as part of their employee benefits packages to attract and retain talent.
Do you need specialist group risk insurance?
Not all insurers will offer this sort of protection for businesses, and you may require or benefit from specialist group risk insurance in certain circumstances:
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If your workforce includes a high number of people in high-risk roles or with pre-existing medical conditions.
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If you want tailored protection beyond standard cover (perhaps for specific illnesses, rehabilitation services, absence support).
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If your employee benefit packages are a key part of the retention or recruitment strategy.
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If you’re a large employer and want to control costs, reduce turnover, or boost wellbeing metrics.
Specialist group risk providers can help design bespoke policies suited to your organisation’s size, demographics, and risk profile. However, you’ll usually need to approach them through an insurance broker or advisor.
Examples of group risk products
Here are some of the common group risk benefit products, how they work, and what they typically cover:
Group life assurance
Pays a lump sum to the employee’s beneficiaries if they die while in service (or during the policy term). The life insurance payout is often tax-free, and the benefit is typically calculated as a multiple of the employee's salary.
Some policies also include terminal illness cover (early payout if the employee is diagnosed with a terminal condition).
Group income protection
Group income protection covers part of an employee's salary (usually 50% to 75%) if they can’t work due to illness or injury, often after a deferred period and after any company sick-pay or short-term cover ends.
It helps maintain financial stability for employees on long-term absences, which may include rehabilitation or occupational health services.
Group critical illness cover
Pays employees a lump sum benefit if they’re diagnosed with a specified serious illness or if they undergo certain medical procedures.
This can help with medical costs, lifestyle adjustments, or cover family financial needs during treatment for conditions like cancer. The specific list of illnesses is defined in the group critical illness policy (and varies).
Benefits of group risk insurance
These protection policies offer plenty of advantages for both employers and employees. Here are the key benefits of taking out group risk insurance:
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Cost efficient: Group schemes tend to be cheaper per person than equivalent individual policies due to economies of scale and pooled risk.
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Employee wellbeing: Offering group protection improves financial security and can boost staff retention, loyalty, broader wellbeing, and even productivity.
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Minimise absences: Proper protection can help employees overcome unexpected issues more quickly and even return to work sooner with support.
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Attractive benefit package: Employers can offer protection benefits (such as death, illness, and incapacity) often as part of the total remuneration, making roles more competitive.
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Administrative simplicity: Because it’s one contract and often arranged through payroll or HR, it’s simpler than coordinating many individual policies.
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Risk mitigation for employers: Helps employers manage liability around things like occupational sick pay or contractual obligations.
Who offers this type of insurance?
Many insurers and brokers in the UK provide group risk products. Some are specialists, others offer them alongside pensions, healthcare, or private medical insurance. However, you may need bespoke support to help design and advise on group risk strategies.
Here are examples of some UK insurance providers that may offer some level of group risk insurance for certain businesses:
If you want to compare quotes and get a realistic idea of the group risk insurance options available, your best strategy is to speak with a business protection specialist.
Get bespoke group risk insurance quotes
What impacts the costs of group insurance?
The price calculation isn’t one-size-fits-all. Premiums are calculated based on several factors that reflect the risk profile of your workforce and the scope of cover chosen. Here are the key areas that influence the cost of group risk insurance:
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Workforce demographics: The average age, gender mix, and overall health of your employees can affect costs. A younger workforce generally attracts lower premiums, while older staff or those in higher-risk categories may increase them.
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Industry and occupation: Employees working in high-risk industries (such as construction or manufacturing) may face higher premiums than those in lower-risk office-based roles.
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Benefit levels and structure: The size of the payout matters. For example, group life insurance at 4 times salary will cost more than 2 times salary. Similarly, longer-term income protection or critical illness cover with broader definitions and shorter deferred periods tend to carry higher costs.
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Number of employees: Larger groups often benefit from economies of scale, reducing the per-employee premium. However, the risk profile of the group as a whole still plays a role.
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Free cover limits and underwriting: Policies with higher free cover limits (the amount of cover provided without medical underwriting) may cost more, as the insurer is taking on a greater upfront risk.
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Claims history: Some insurers will take into account the past claims experience of your workforce when setting premiums, particularly for renewals.
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Added benefits: Many group risk insurers now bundle in wellbeing programmes, employee assistance services, or rehabilitation support. While these additions may add value, they could slightly increase overall costs.
Why choose Teito to help arrange your group risk insurance?
Arranging group risk insurance can be complex, as you need to balance cost, risk exposure, contract terms, trust arrangements, and effective employee communication.
We can help simplify that process. Whether you're a small employer or a large organisation, our advisors can help you design and compare group risk policies that match your workforce’s specific needs.
Here’s why employers across the UK trust us to arrange their group risk insurance:
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We specialise in bespoke group risk protection solutions
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Our advisers are 5-star rated on leading review sites
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Free initial consultation with no obligation to proceed
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Access specialist insurers with exclusive deals
If you’d like to explore how group risk insurance could benefit your company, you can speak with one of our experienced insurance specialists here.
FAQs
The underwriting and risk selection process helps insurers identify adverse risks. For example, groups with unusually high health risks, older age profiles, or many people in high-risk occupations.
It ensures that premiums reflect likely claims costs, avoids situations where premiums are set too low for the risk, and helps maintain fairness across group members.