Group risk benefits explained: What insurers really pay out

If you’re planning on introducing group risk benefits, for example Group Life Insurance (also known as Death in Service) and Group Income Protection (GIP), you may wonder how often they’re used and what benefit they can provide your business. 

The latest UK payout figures (2024) 

Industry body GRiD reports that the UK group risk market paid out £2.59bn in claims (about £7.1m per day) in 2024, which breaks down as: 

• £1.74bn under Group Life 
•  £674.5m under Group Income Protection 

That’s an increase on 2023, when total claims were £2.49bn [1]. 

GRiD also found strong return-to-work outcomes, with 72% of new GIP claimants in 2024 returning to work after insurer support [2]. In addition to financial payment, one of the most valuable benefits of group risk insurances is the support it can provide in helping employees stay in or return to work through phased returns or the vocational rehabilitation support. 

More than just payouts – valued everyday support  

Many group risk policies typically provide additional support services that employees (and often their household) can access without making a claim. Common support services provided by Group Life and Group Income Protection are: 

• 24/7 virtual GP (phone/video). 
• Mental health support and counselling. 
• Early-intervention and vocational rehabilitation. 

Availability varies by provider and product, so it’s worth checking what your policy includes and how dependants can access it. These are typically non-contractual benefits which can be changed by insurers. 

Why this matters for employers? 

1. Financial protection: Meaningful lump sums for families and income for employees if they’re long-term absent. This support can be vital for supporting their family or financial commitments. 
2. Access to cover for those with pre-existing conditions: Any staff with pre-existing conditions may find it difficult to source their own personal cover; however, employer schemes typically provide a ‘free cover limit’. This is an insured amount for each employee whih is available until any medical underwriting is required. 
3. Productivity and cost control: Early-intervention and rehabilitation services help more people return to work sooner and more effectively. 
4. Everyday wellbeing: Staff (and their family) can often use GP, mental health and discount services all year-round.

Next steps

• Consider your workforce. 
  • Take into account the age, roles, pay bands of staff.
  • Identify where financial protection or health support would help most. 
• Audit your current package for gaps/overlap.
  • List what you already offer, uptake, and usage. 
• Set a clear brief to your consultant. 
  • Define your objectives, budget and eligibility. 

Sources

[1] Group risk industry pays out record £2.49bn in claims - Grid - Health & Protection

[2] Seventy-two per cent of new absentees under group income protection policies returned to work during 2024 - GRiD

Important information

The information provided is for general guidance only and reflects our understanding of HMRC rules at the time of writing. It does not constitute legal, tax, or accounting advice. Employers should seek specific advice from their accountant or tax adviser to ensure the approach taken is appropriate for their circumstances.