Group Life Insurance: Employer Benefits and Personal Cover

Group life insurance is arranged for eligible members of an employer’s scheme. The benefit, eligibility and administration depend on the scheme rules; it should not be assumed to replace personally owned protection.

How employer cover is structured

A benefit may be linked to salary or another scheme definition. Payment and beneficiary decisions can involve trustees or other arrangements. Ask for the actual benefit statement and scheme booklet rather than assuming a particular salary multiple applies.

Eligibility and leaving employment

Joining, absence, retirement and leaving employment can affect cover. Free-cover limits and evidence requirements differ. A benefit that depends on employment may not meet a family need that continues after a job change.

Calculate the remaining personal need

Add outstanding borrowing and the family support needed over time, then allow for existing policies, accessible savings and reliable employer benefits. Include the cost of replacing unpaid childcare or caring work. Consider affordability and how long the need will last, rather than assuming a salary multiple suits everyone.

Tax and policy arrangements

Group schemes and personally owned policies have different ownership and tax features. Company deductibility, member tax treatment and estate consequences require the appropriate rules and circumstances to be checked. Do not assume every employer-paid arrangement has identical treatment.

Practical checks for employees

Confirm who is covered, the benefit basis, current nominations, exclusions or restrictions and how to claim. Retain the information with personal policy documents. Read holding multiple policies and assessing family cover.

Information for employers

An employer establishing or reviewing a scheme should obtain business protection and employee-benefit advice. My Key Finance’s business protection service can discuss the appropriate route.

Compare your options

Speak to our advice team about the protection discussed here. Initial quotations are subject to the insurer assessing the application. Cover begins only when the insurer confirms the policy is in force; completing a form or receiving a quote does not start cover.

Updated October 2026. General information, not a personal recommendation or a quotation. Eligibility, exclusions, premiums and tax treatment depend on the policy and individual circumstances. Discount Life Cover is a trading style of My Key Finance Ltd, authorised and regulated by the FCA, FRN 628996.

Further information: MoneyHelper: life insurance.