Group Critical Illness
Being diagnosed with a serious critical illness is an extremely distressing time for anyone, their loved ones, and their employer. Although advances in medicines and treatments are constantly improving survival rates, recovery is often prolonged.
Group Critical Illness cover is another highly valued employee benefit that can provide additional financial security while an employee is off work because of a critical illness.
Often used to supplement sick pay and Private Medical Insurance, Group Critical Illness cover is designed to pay a tax-free lump sum directly to an employee should they suffer from a list of specifically pre-defined medical conditions or surgical procedures, classified as critical illnesses (e.g., cancer, heart attack, stroke), and survive for a set number of days (typically 14 to 30 days depending on the insurer).
The insurers provide complete lists of the exact conditions and associated severities that they cover, but the following will typically be included:
- Cancer – excluding less advanced cases
- Heart attack – of specified severity
- Stroke – resulting in permanent symptoms
{For example, you cannot claim for kidney failure if you have previously had symptoms of polycystic kidney disease or been treated for it}
The benefit payment can be used by the employee to help them access treatment or make home or lifestyle changes, often enabling them to return to work sooner.
Where cover is paid for by the employer, corporation tax relief is usually given on the premiums. The contributions paid by the employer are however treated as a P11d ‘benefit in kind’ for the employees by HMRC, so an employee’s personal tax allowance may be reduced.
Important Note: Pre-existing medical conditions are almost never covered by these types of schemes and so employees may not be able to claim for an illness if they have had symptoms or been treated for that illness (or for any related conditions) before they join an employer’s policy.