Group life assurance cover is life insurance an employer arranges for its staff as one scheme: if a member dies while employed there, a lump sum, often a multiple of salary, is paid to the scheme's trustees, who decide who receives it with the member's recorded wishes in mind. The employer picks which staff are included and the level of benefit, and holds the policy; employees are members of the scheme, not policyholders.

Curious whether cover you own should sit alongside your employer's scheme? An FCA-authorised broker will happily weigh that up with you over a free phone call, and asking for one takes a few minutes with the form on this page.

What does group life assurance pay, and who receives it?

Legal & General's technical guide for employers and their advisers (May 2025) says that Group Life Assurance and Dependants' Pensions are also known as death in service benefits. Aviva's guide for employers buying the policy (GR01089, January 2026), which is written for the business rather than for scheme members, says its policy will pay "a lump sum and/or a pension benefit" to the employee's spouse or partner and/or their dependants.

The lump sum is usually set one of two ways. Aviva's guide says an employer can choose "a fixed amount or a multiple of an employee's salary", with a multiple running from one times to ten times salary. L&G offers the same two options and lets a multiple of earnings be capped at a set maximum such as £1 million. The pension, where offered, can be paid in addition to the lump sum or on its own.

The insurer does not usually pay the family directly. Aviva's guide says it pays lump sums "as advised by the Trustees", the people the employer appoints to look after the policy and any benefits paid. L&G's guide says the trustees distribute the benefit in line with the trust and rules of the scheme, "while considering any wishes the member has made". Royal London's consumer guide (September 2023) puts it more bluntly: where the money goes to a trust, the trustees have the final say even over a nominated beneficiary.

Members normally fill in an expression of wish form, which tells the trustees who they would prefer. It is guidance for the trustees, not an instruction, so it is worth keeping up to date. How a death in service payment fits with cover you hold yourself is covered in do I need life insurance if I have death in service benefit.

How does an employer's group life scheme work in the UK?

It starts with the employer, not the employee. Aviva's employer guide sets out the employer's part in brief:

  • choosing whether to insure all employees or "just a specific section", and the employee age at which cover will cease;
  • deciding the level of benefit, with different categories of membership able to have different levels;
  • placing the policy under its own trust and scheme rules, or in Aviva's Group Life Master Trust;
  • providing the member information the insurer needs each year to calculate premiums and assess claims.

The same guide says employers normally pay all the premiums, and that employees with a current UK, Channel Islands or Isle of Man contract of employment can join if they meet the employer's criteria, which can include entry ages, entry dates and waiting periods. Aviva's knowledge-centre page (December 2025) adds that the cost depends on the provider and how many employees are covered, that there is normally a maximum age limit and the total benefit might be capped, and it lists "whether you fund the policy, or the employee pays monthly premiums" among the employer's choices, so it is worth asking which applies to you.

Cost is worked out for the group, not for you personally. L&G's guide says it will usually use a unit rate, a cost for each £100 of total benefit, multiplied by the policy's total benefit "at the start of each policy year", and that it will usually guarantee the unit rate until at least the second annual renewal date. Unlike an individual term life insurance policy, which you own, the premium is reworked as the scheme's total benefit changes.

What is an example of group life cover?

A hypothetical scheme makes the arithmetic concrete; it is not any employer's or insurer's actual terms. Suppose an employer insures every employee for four times annual salary. An employee on £30,000 would have a benefit of 4 × £30,000 = £120,000. A colleague on £50,000 would have 4 × £50,000 = £200,000. A different scheme might instead pay one fixed sum to everyone in a category, or a lower or higher multiple for different groups.

Whether a figure like that would be enough for a particular household is a separate question. If you would like to work it through for yours, an FCA-authorised broker can do that with you on a free call, and the short form is where it starts.

Aviva's guide uses a high earner to show how the choice of set-up might affect a person's benefit: a salary of £200,000 and a benefit of 6 x salary, which is £1,200,000. Group life is usually set up either as a registered scheme, which Aviva says is "effectively treated like an Occupational Pension Scheme" and whose lump sums count towards the member's Lump Sum and Death Benefit Allowance, or as an excepted policy, whose lump sums do not. How HMRC treats each, and what that means for the employer, is covered on the death in service insurance for employers page.

How does group life differ from other workplace cover and from cover you buy?

Group life pays on death. Group critical illness, which pays on diagnosis of a covered illness, is a separate policy: see what is group critical illness cover. Public-sector schemes have their own rules, as on the civil servant and armed forces death in service pages. For the employer's side, death in service insurance for employers goes through the choices, and other employer topics sit under business and workplace cover.

Group cover also differs from an individual policy in who holds it and how long it lasts. The employer is the policyholder, the insurer prices the whole group, and the cover is tied to the job: L&G's guide says it stops covering a member who leaves the employer, and that a member cannot keep the cover going at their own expense afterwards. On a policy you buy yourself, level term cover is the nearest comparison for a fixed sum paid on death; you choose the amount, the term and who is paid, and changing jobs does not end it.

For a company director or business owner thinking about cover for themselves or one other person, the single-person alternative is relevant life insurance, and the employer-as-beneficiary version is key person insurance.

If you would like cover that stays yours whichever employer you work for, a broker can go through prices and options with you; fill in the form and they will ring at no cost.

Frequently asked questions

What is group level term life insurance?

It is a loose name for group life cover through an employer. The benefit is often a multiple of salary, so it can move as pay changes, and L&G's guide says premiums may go up or down as the amount of benefit it covers changes, so neither is necessarily level for the life of the scheme. Your scheme booklet or the HR department will show how your own benefit is worked out.

Who gets the money from a group life scheme?

The insurer pays the trustees, and the trustees decide who receives it, considering any wishes the member has recorded. Aviva's guide says that once it has the information it needs, its claims team will usually pay the claim to the trustees within two to five days; how long distribution takes after that depends on the trustees.

Do employees need a medical for group life cover?

Not necessarily. Aviva's guide says that while an employee's benefit stays below its free cover limit it asks for no medical information, and above it, it requests information so underwriters can decide on the excess; the benefit below the limit will normally stay covered whatever they decide. Another insurer's limits may differ, so the scheme documents are the place to check.

How many employees does a group life scheme need?

Aviva's guide says its free cover limit is offered to schemes with as few as three lives. L&G's guide says it needs a minimum of 3 members to start a policy using its ONIX service, which is available where an adviser arranges the cover, and at least 10 if ONIX has not been used. Other insurers set their own minimums.

Planning a scheme for your staff, or cover held in your own name? For either, complete the brief form on this page. Afterwards an FCA-authorised broker telephones to talk the options over, with no fee for the call.

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