What does group critical illness insurance cover? A guide for UK companies

Group critical illness insurance provides financial protection for employees diagnosed with serious medical conditions, offering a lump-sum payment to support them financially during difficult times. In this guide, we’ll detail what group critical illness insurance covers, its importance for businesses, and how to effectively incorporate it into your employee benefits package.

Darren Perkins

Managing Director

Darren Perkins

Managing Director

Group Risk

Guides

Business

October 11, 2024

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Read time:

6

minutes

What is group critical illness insurance?

Group critical illness insurance supports employees who are employed at the time of claim financially if they’re diagnosed with one of the conditions included in the policy terms. The tax-free, one-off payment can be used in the way that suits them best, such as for managing expenses such as treatments, home modifications, and other essential costs during recovery.

Which illnesses does group critical illness insurance cover?

Group critical illness insurance covers a wide range of conditions which vary depending on your policy and who the provider is. For example, a policy with core cover may cover fewer critical illnesses than a policy with core+ cover. This list below represents the critical illnesses that may be available across various policies and providers as a whole, but your options may vary depending on the policy you choose:

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Category	Illness	Details
Cardiovascular and circulatory conditions	Heart attack	Myocardial infarction of specified severity.
	Stroke	Resulting in permanent symptoms lasting at least 24 hours.
	Coronary artery bypass surgery	Open-heart surgery to correct the narrowing or blockage of coronary arteries.
	Aorta graft surgery	Surgery requiring excision and surgical replacement of a portion of the aorta with a graft. Excludes stent insertion or endovascular repair.
	Cardiomyopathy	Definite diagnosis with permanent impairment of heart function, impacting the ability to perform physical activities.
	Primary pulmonary hypertension	Resulting in permanent physical impairment as per NYHA Class 3 or worse.
Cancers	Invasive cancer	Typically covering various types of invasive cancers, excluding less advanced cases.
	Low-grade prostate cancer	Covers treatment of prostate cancer with a Gleason score between 2 and 6, not yet advanced.
	Carcinoma in situ (breast)	Surgery following diagnosis of carcinoma in situ of the breast.
	Leukaemia	Cancer of blood-forming tissues, including bone marrow.
	Lymphoma	Cancer of the lymphatic system, including Hodgkin’s and non-Hodgkin’s lymphoma.
	Malignant brain tumour	Resulting in permanent neurological deficit or requiring surgical removal. Excludes certain types of benign tumours.
	Malignant melanoma	A severe type of skin cancer.
Neurological disorders	Multiple sclerosis	With persisting symptoms or disability.
	Parkinson’s disease	Resulting in permanent symptoms such as tremors or muscle rigidity.
	Alzheimer’s disease	Resulting in significant cognitive impairment.
	Motor neurone disease	A progressive neurological condition affecting muscle function with permanent symptoms.
	Progressive supranuclear palsy	Results in permanent impairment of eye movements and motor function.
	Benign brain tumour	Resulting in permanent symptoms or requiring surgery, excluding pituitary tumours.
	Encephalitis	Inflammation of brain tissue causing permanent neurological deficit.
	Coma	Resulting in permanent neurological deficit and requiring life support.
Organ-related conditions	Kidney failure	Requiring permanent dialysis.
	Liver failure	Of advanced stage, leading to permanent jaundice, ascites, and encephalopathy.
	Major organ transplant	Receiving a transplant from another donor for a major organ or being on an official waiting list.
	Lung disease	Advanced stage, requiring regular oxygen treatment on a permanent basis.
Sensory impairments	Blindness	Permanent and irreversible loss of sight in both eyes.
	Deafness	Permanent and irreversible loss of hearing in both ears.
	Loss of speech	Total, permanent, and irreversible loss of the ability to speak.
Musculoskeletal conditions	Paralysis of limb	Total and irreversible loss of muscle function in any limb.
	Loss of limbs	Permanent physical severance of an arm, hand, leg, or foot.
	Third-degree burns	Covering at least 20% of the body's surface area or 20% of the face or head.
Infectious diseases	HIV infection	Caught through blood transfusion, physical assault, or occupational accident.
	Bacterial meningitis	Resulting in permanent neurological symptoms.
Blood disorders	Aplastic anaemia	With permanent bone marrow failure, leading to anaemia, neutropenia, and thrombocytopenia.
	Sickle cell disease	If it leads to severe complications.
Autoimmune disorders	Systemic lupus erythematosus	With severe complications such as permanent neurological deficit or impaired kidney function.
Severe injuries	Traumatic brain injury	Resulting in permanent neurological deficit.
	Spinal stroke	Resulting in symptoms lasting at least 24 hours.
Other serious conditions	Creutzfeldt-Jakob disease (CJD)	Resulting in permanent symptoms and requiring permanent supervision.
	Removal of an eyeball	Surgical removal of an eyeball due to injury or disease.

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Exclusions and limits to consider

As with all insurance policies, there will be exclusions and limits that apply. These are conditions or circumstances under which the policy will not pay out after a claim is made. Please note that exclusions and limits vary from policy to policy, and the below list is a representation only.

Group critical illness exclusions

Pre-existing conditions: Your policy may exclude conditions and any conditions related to them that existed before the start of cover. If an employee is diagnosed with an illness before the policy begins, or if symptoms were present but not yet diagnosed, these also may not be covered.
Less severe conditions: Some conditions may be excluded if they are not deemed severe enough by the policy's definitions. For example, non-invasive cancers, early-stage heart conditions, or less serious neurological issues might not be covered.
Self-inflicted injuries: Any injuries or illnesses resulting from self-harm or attempted suicide are usually not covered by group critical illness policies.
Risky activities: Engaging in certain high-risk activities, such as extreme sports or dangerous hobbies, may lead to exclusions.
Certain cancers: Policies often exclude certain types of cancers, such as those classified as having low malignancy or those in very early stages, such as some skin cancers or pre-malignant tumours.

Policy limits

Maximum payout limits: Each policy will have a maximum sum assured that it will pay out, which can vary depending on the level of coverage chosen. For example, there may be a cap of £500,000 or five times an employee’s salary (depending on which is the lower amount).
Total permanent disability limits: For policies that include coverage for total permanent disability, there may be a lower maximum payout amount compared to other conditions.
Children’s cover limits: If your policy includes children's group critical illness cover, there may be limits on the payout for these claims, often around 25% of the main coverage amount, with an overall cap (e.g., £25,000).

When does your business need group critical illness insurance?

Group critical illness insurance is particularly beneficial as part of an employee benefits package, offering crucial support to employees during challenging times. Consider offering this coverage if:

Your business values comprehensive employee benefits: To attract and retain top talent, offering a robust benefits package that includes group critical illness insurance may make your business more competitive. This insurance shows employees that you care about their long-term well-being, which can enhance loyalty and morale.
You want to support your employees during serious health crises: If a key employee falls seriously ill, group critical illness insurance can provide them with the financial support they need, allowing them to focus on recovery without the added stress of financial concerns. While the employee receives the payout directly, this support may reduce the need for the company to provide additional financial assistance during their absence.
You aim to foster a supportive work environment: Providing group critical illness insurance as part of your benefits package demonstrates a commitment to your employees' overall health and financial security, which can contribute to a positive and supportive workplace culture.

What affects the cost of group critical illness insurance for your business?

The cost of group critical illness insurance can vary widely depending on several factors:

Employee demographics: Age, health, gender, salary, location and occupation may impact the cost.
Level of coverage: The more comprehensive the coverage, the higher the premiums.
Number of employees covered: Group policies can offer cost savings, but the total cost will increase with the number of employees insured as this would increase the total sum assured.
Policy terms: The rates for your scheme may be guaranteed for 2 to 3 years, but after this, the price may change based on other factors such as market conditions and changes in your company.

How to implement group critical illness insurance in your business

Implementing group critical illness insurance as part of your employee benefits package requires careful planning. Here’s how you can get started:

1. Consult with a specialist: Work with an independent financial adviser or a specialist broker who understands business insurance needs. They can help you design a policy that fits your business.

2. Educate your employees: Make sure your employees understand the benefits of group critical illness insurance. Clear communication is key to ensuring they appreciate the value of the coverage.

3. Review regularly: As your business grows and your workforce changes, regularly review and adjust your insurance coverage to ensure it continues to meet your needs.

Three key considerations when choosing group critical illness insurance for your business

Employee demographics: Tailor the policy to the needs of your workforce, considering factors such as age, health, and roles within the company.
Integration with other benefits: Coordinate group critical illness coverage with other employee benefits like life insurance and income protection to create a comprehensive benefits package.
Provider reputation: Choose a reputable insurance provider with a strong financial background and a history of fair claim settlements.

Compare group critical illness cover policies

Choosing the right group critical illness insurance for your business is crucial to ensuring that your employees are well-protected and that your benefits package remains competitive. With so many options available on the UK market, finding the best policy may be challenging and time-consuming.

At Premier Choice Group, we offer independent reviews of group critical illness cover policies tailored to your business's unique needs. Our experts will help you compare the various options, ensuring that you select the most suitable coverage for your employees and your business. Get started by completing the form below.

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