Set up group life insurance without the benefits admin
Group life insurance pays a tax-free lump sum to your people’s families if the worst happens, and they value that kind of financial security. But chasing brokers, reconciling data, and fielding employee queries isn't how modern HR teams want to spend their time. As a regulated broker and platform, Kota handles everything from procurement through to renewals, all in one place.
About
group life insurance
What is group life insurance?
Most schemes also come with a free cover limit, which is the maximum level of cover your employees can receive without needing to go through individual medical underwriting. Below that threshold, they’re accepted automatically. No medical exams and no individual assessments. Above it, the insurer may ask for additional medical information.
The free cover limit varies by provider and scheme size. But for most SME schemes it's generous enough that the majority of your employees won't come close to it.
Group life vs. Death in service
Insurers and HR teams tend to say “group life insurance” while employees are more likely to hear “death in service.”
The mechanics, the payout structure, and the trust arrangements are all the same.
Group life insurance includes:
-> A lump sum payout of 2x to 4x salary to the employee's nominated beneficiary
-> Guaranteed acceptance up to the free cover limit, with no individual medical underwriting below that threshold
-> Cover for all causes of death, not just work-related incidents
-> The option to increase cover above the free cover limit, subject to medical underwriting
Why offer group life insurance cover?
Helps you attract and retain top talent
A group life insurance scheme:
- Strengthens your offer at the point of hire, particularly against competitors who don't include it
- Gives existing employees a tangible reason to stay, especially those with families and financial commitments
- Signals long-term commitment to your people's wellbeing
Helps you demonstrate genuine duty of care
- Shows employees you've thought about their lives outside of work
- Supports your employer brand by demonstrating genuine, tangible care rather than surface-level perks
- Provides real financial protection at the moment an employee's family needs it most
High value for your people at a low cost to you
With group life insurance:
- Premiums qualify as a fully allowable business expense, reducing your corporation tax liability
- There's no benefit-in-kind for employees, so no P11D reporting and no impact on their tax code
- What you agree is what you pay month after month, which removes any last-minute renewal panic
Supports your employees'
financial wellbeing
An employer health cash plan:
- Reimburses the everyday healthcare costs your people might otherwise go without
- Reduces the financial stress that quietly affects focus, morale, and productivity
- Shows your people you understand the real pressures they're facing
How to set up
group life insurance
Here's what the full lifecycle looks like.
Choose a cover level
Your policy pays out a multiple of each employee's salary, typically between 2x and 4x. The cover level you choose applies to all eligible employees under your scheme. Your eligibility rules, such as whether cover starts from day one or after a probation period, are also agreed upfront.
Get quotes from providers
To get quotes, your broker or insurer will need some basic data about your workforce Things like headcount, average salaries, age profile, and industry classification. Quotes are calculated based on your group's overall profile, which is what makes group cover significantly cheaper per person than individual life insurance policies.
Set up the trust arrangement
Almost all group life schemes in the UK are written under a discretionary trust. This is a legal arrangement that sits the policy outside of your employee's estate, free from inheritance tax. Your provider typically sets the trust up, and most offer a master trust your company can simply join.
Enrol your employees
Once your scheme is live, your employees are enroled. During onboarding, each one completes an expression of wish form, nominating who they'd like the payout to go to if the worst happens. It can take up to 2 weeks or less before their cover is confirmed.
Manage membership through the annual sweep
Group life schemes don't require you to notify the insurer every time someone joins or leaves.
Instead, your policy is reconciled once a year through an annual sweep. At renewal, you provide the insurer with an updated list of employees (including dates of birth, salaries, and any changes from the past year) and your premium is adjusted accordingly. If headcount or salaries have grown, an additional premium is due. If they've dropped, you may be owed a refund.
The admin burden sits in keeping that membership data accurate in the first place, so that when renewal comes around, the sweep reflects reality and you're not over- or underpaying.
Insurance renewal coming up? Get a free benefits review.
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Who offers
group life insurance?
How much does
group life insurance cost?
Group life insurance is cost-assessible, but the premium you pay isn't fixed. It's shaped by a combination of factors specific to your workforce. Knowing those factors is crucial when comparing quotes, so you can make cover decisions that work for your budget without shortchanging your people.
Here's what shapes your premium:
Your employees' age profile
The level of cover you choose
The size of your workforce
Your industry and employees' occupations
Where your employees are based
Your policy cease age
Tax implications of
group life insurance
United Kingdom
Employer treatment
Employee treatment
Excepted policy note
Ireland
Employer treatment
Employee treatment
Revenue/trust notes
What you need to set up
group life insurance
You don't need a lot to get started. Most providers can have a group life scheme up and running with a handful of data points and a few key decisions.
Here's what to have ready before you approach a broker or provider:
Basic employee census data
Cover level decision
Eligibility rules
Beneficiary nominations
Provider selection
How Kota handles
Group Life Insurance
Many companies manage group life insurance through a fragmented combination of broker, insurer portal, and HRIS, with manual updates flowing between each. Kota replaces all of that with a single connected system.
Compare
Set up
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Manage
Protect your people without the broker coordination and manual admin
Frequently asked questions
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Group life insurance is arranged and paid for by an employer as part of an employee’s benefits package. Personal life insurance is taken out and paid for by the individual. Group cover is typically cheaper per unit of cover, doesn't require individual medical underwriting below the free cover limit, and ends when employment ends. For employees without personal cover, their employer's group policy is often the only life insurance protection they have.
The employer pays the premium in full. That means there's no cost to employees and nothing deducted from their salary. Premiums are treated as a fully allowable business expense, so the net cost to your business is lower than the headline premium suggests.
It varies based on your workforce's age profile, the cover multiple you choose, your industry, and your group size. Premiums are calculated as a small percentage of your total insured payroll, which means costs scale with your headcount.
For most employers and employees, no. Premiums are a fully allowable business expense. For employees, group life insurance written under a registered scheme is not a benefit-in-kind, so there's no income tax, no National Insurance, and no P11D reporting.
The lump sum payout to beneficiaries is also tax-free within the Lump Sum and Death Benefit Allowance. If you have high earners whose total pension and death benefits may exceed this threshold, it's worth seeking specialist advice on whether an excepted group life policy is more appropriate.
The free cover limit is the maximum level of cover an individual employee can receive without needing to go through individual medical underwriting. Below that threshold, all employees are accepted automatically with no medical exams or health questionnaires. Above it, the insurer may request additional medical information.
The threshold varies by provider and scheme size, but for most SME schemes it's set generously enough that the vast majority of employees won't come close to it.
No, it isn't. Employers have no legal obligation to offer group life insurance. But in tech and digital-first companies, where competition for talent is fierce, it's increasingly expected as part of a complete benefits package.
Candidates comparing offers will notice its absence, and employees with families and financial commitments value it greatly. Offering it is a relatively modest investment that delivers an outsized signal about the kind of employer you are.
Benefits you and your employees will love using
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