How does critical illness cover support employees when they return to work?

Critical illness cover pays a lump sum to an employee who is diagnosed with a serious condition covered by the policy. Terms and conditions vary, and each policy includes a list of covered conditions. The diagnosis doesn't have to be terminal, but the condition must meet the policy's criteria.

By investing in group critical illness cover, you can cover your entire workforce and pay the premium for them. Some policies also cover children, and you can let parents decide whether to add their children and pay the additional costs. Some group life insurance policies let you add critical illness cover as an optional extra. It's a good idea to speak to a broker to discuss the right option for your needs and budget.

As mentioned, the conditions a policy covers vary by provider, so always review the policy terms and conditions carefully when choosing group critical illness cover. Most providers cover cancer, heart attack, strokes and multiple sclerosis.

Some critical illness cover pays out for additional conditions, either as part of their core coverage or through extended coverage you can add at an additional cost. These can include neurological conditions such as Alzheimer's disease, motor neurone disease and traumatic brain injuries, heart and circulatory illnesses, and organ failure. Some critical illness cover pays out for paralysis, limb loss, deafness, or blindness.

Each condition must satisfy eligibility criteria relating to the severity of the illness. Critical illness cover is designed to pay out in the event of a significant or life-changing illness. For example, if a cancer diagnosis is transient or minor, it often won't meet the relevant severity standards. A successful claim depends on the precise medical diagnosis. Critical illness cover also excludes pre-existing conditions that employees received treatment or advice for before joining the policy. Employees must also survive for a defined period (usually around 10-14 days) after diagnosis for the policy to pay out.

Providing your team with group critical illness cover as part of their benefits package benefits them and your business.

Benefits for employees

Group critical illness cover provides your employees with a tax-free lump sum payment if they're diagnosed with a serious illness. They can spend the lump sum payment as they wish. This means it offers flexible financial support to help them with their recovery, home adaptations for a life-changing illness with ongoing disability, or funeral expenses if the diagnosis is terminal. Alternatively, they can use it to pay living expenses, go on holiday, or leave their loved ones a nest egg when they're gone.

An individual can buy a critical illness policy, but coverage can be expensive, and many employees choose to invest in other types of financial protection, such as life cover. Group critical illness cover provides additional financial support, and the cost per head is typically lower than an individual policy. Policies can also cover children, so you can offer staff the option to fund coverage on a voluntary basis.

Finally, group critical illness cover gives employees access to a range of health and well-being services.

Benefits for your business

Being diagnosed with a serious illness can cause stress and anxiety for several reasons. Including critical illness cover in your employee benefits package demonstrates a supportive company culture that's prepared to provide financial support if employees can't work due to illness. This can help your business attract top talent and reduce turnover. It can also boost employee morale as staff feel valued and supported.

The premiums for a group critical illness policy are an allowable expense for corporation tax, meaning you can deduct the cost and lower your bill. Speak to your accountant or financial adviser to ensure you take the most tax-efficient approach for your business, especially if you plan to invest in other insurance policies to support your employee benefits package. It's also a good idea to seek advice from an independent insurance broker to get the best coverage for your needs and budget.

Critical illness cover provides financial support when an employee is diagnosed with a serious illness. The main focus is financial protection through a tax-free lump sum that employees can use as they wish. However, it can also support employee wellbeing through other services that help employees navigate a life-changing diagnosis.

Services vary by provider, and some are only available after an employee makes a claim. When comparing quotes, check what services the policy covers and whether they're included as standard or as an optional extra.

Here are a few services you might find with critical illness cover.

Second medical opinion

Many critical illness policies include access to a second medical opinion. This typically includes a second opinion on the diagnosis, treatment or both. This can help if there's any uncertainty about the diagnosis or whether your employee is on the right treatment pathway. Policies typically cover a broad range of leading independent consultants, with some policies covering face-to-face consultations.

As with the main policy, this service is only available for serious health conditions covered by the policy that fulfil the diagnostic criteria. In many cases, an employee can only access the second opinion service if they've been diagnosed with a condition that already meets the claim threshold. Some definitions also mention complex health conditions, so always check what those definitions include and speak to a broker for advice.

Personal nurse guidance

Personal support from a nurse is typically only available after a claim. The service provides a nurse to support employees through the diagnosis and subsequent treatment, although this varies by provider. With some providers, employees receive ongoing support from a named nurse, giving them a single point of contact if they have questions. Other policies provide support via a team of nurses. Most services provide support via telephone helplines while others include direct messaging services. Every service aims to give employees access to guidance from nurses experienced in serious illness and supporting recovery.

The service doesn't provide medical care, but aims to answer questions, offer guidance and signpost employees to other services and resources when needed.

Mental health support

A serious or life-changing diagnosis can significantly impact an employee's mental health. Some providers offer access to services including telephone helplines, counselling sessions and home visits from specialist nurses. Again, these vary by provider. Group critical illness cover often provides telephone services similar to those available through Employee Assistance Programmes (EAPs) available with group health insurance.

Some providers also offer access to a resource library with articles, videos and advice that employees can explore according to their needs. In some cases, these resources can also include training modules for managers so they can identify the signs that an employee is struggling, have supportive conversations and signpost staff to other mental health services if necessary.

Bereavement counselling and family support

Insurers vary in the bereavement support services they provide. Some provide this as a general benefit for employees covered by a critical illness policy, meaning they can access bereavement support and legal services when they experience a loss. Other services mention telephone support for employees facing a terminal diagnosis. This likely means that access to the service goes beyond serious illness and may be subject to separate criteria. Some policies cover services for an employee's family after a bereavement, while others cover only the employee. As always, check the terms and conditions to confirm what your chosen policy offers.

Insurers often partner with third-party providers to offer bereavement support and legal services, which may mean a single provider or multiple providers. We'll examine the legal services critical illness cover provides shortly.

Cancer support

A group critical illness policy will typically pay out when an employee is diagnosed with cancer, except for minor, non-life-threatening cancers. Many providers also offer additional, cancer-specific services such as telephone helplines and tailored pathways for cancer patients. For example, Aviva has partnered with the charity Macmillan Cancer Support to provide access to guidance on health, well-being and financial support following a cancer diagnosis. Zurich offers assessment tools and advice on treatment pathways for employees with advanced cases. Access to these services varies, with some providers offering access to employees and their families.

Some services provide well-being support via member discount schemes that promote activity and healthy living, with tailored support for employees diagnosed with cancer. These include discounts on products and services supporting recovery from cancer.

Digital services

Many well-being services provide telephone support, but there's also a wide variety of digital and app-based services. These include 24/7 virtual GP appointments, mental health support, and video consultations with physiotherapists, dietitians and other health professionals.

Services also offer well-being support to help employees avoid illness and improve their health. Employees can access smoking cessation advice, guided meditation and sleep improvement tools, among other things. Some services are also available to employees' families.

Employee Assistance Programmes

Employee Assistance Programmes (EAPs) provide access to counselling and telephone helplines for advice and guidance when facing other challenges. Most EAPs offer 8-10 counselling or cognitive behavioural therapy sessions. Most employee health insurance policies also offer EAPs, either as part of their core cover or as an optional extra. If you're also planning to invest in health insurance alongside critical illness cover, it's worth speaking to a broker to ensure you get the most cost-effective cover.

In addition to counselling, telephone helplines cover a range of subjects, including health guidance and financial and legal support. These services don't provide tailored legal or financial advice or medical treatment, but can offer general guidance and point employees to additional support if needed. These can be particularly useful for employees facing a serious diagnosis who are worried about the legal implications or their family's financial security.

Well-being support

Insurers typically offer well-being support services to all group critical illness members even if they haven't made a claim. These services aim to improve employees' health and reduce the risk of a serious diagnosis. This benefits your employees by improving their well-being and your business by reducing the risk that staff will need to take time off due to illness.

Services vary, with some providing tailored advice on healthy eating and exercise. Others offer rewards and discounts to encourage healthy habits. These include discounts on gym memberships, online workouts and healthy living products.

Well-being resources

We've mentioned the mental health resources group critical illness cover can provide. Many providers also offer more extensive libraries of resources designed to encourage healthy living, which employees can explore based on their needs and interests. Some resources also provide guidance on building good relationships and managing stress.

Mental and physical well-being go hand in hand, so these resources work together to improve health, reduce stress and help prevent serious illness.

Workplace training

High-quality workplace training helps employees understand the importance of self-care and gives them effective tools and strategies for daily life. It can also educate managers and HR professionals on topics that help them understand and support their teams.

Some critical illness cover offers access to resources you can use in-house, along with online training sessions on topics including neurodiversity, menopause, and suicide prevention. Other providers offer access to vetted external training providers so you can choose from a range of options.

Access to legal services

As mentioned, if your policy includes an EAP, your employees can already access general legal guidance to help them understand their rights and find trusted legal advice if needed. Some group critical illness cover goes further, with access to various legal services at discounted rates.

When an employee receives a serious diagnosis, they may want to ensure their affairs are in order and that their loved ones have sufficient financial protection. This could include financial and estate planning, writing a will, or planning their funeral in the case of a terminal diagnosis. Knowing everything is in order can reduce stress, which may increase the likelihood of a full recovery.

Some insurers bundle their legal services with bereavement counselling and probate support that's also available to your employees' loved ones.

Some serious illnesses can lead to a full recovery with no lasting after-effects. Others may result in a terminal diagnosis. In some circumstances, your employee may be able to return to work but will need adaptations to make the workplace accessible. If an employee has made a successful claim on their critical illness cover, they may have used the lump sum to fund home adaptations. However, if they need adjustments to their working environment, you'll need to consider what changes to make.

The Equality Act 2010 creates a duty to make reasonable adjustments. What's considered reasonable depends on the circumstances, but will generally mean any measures you can implement without incurring excessive costs and that take practicality into account. In some cases, adjustments could include flexible working arrangements that allow an employee to change their working hours or work from home. Discussions about adjustments and whether an employee can return to work should form part of your conversations with them during their absence, in consultation with HR, occupational health and your legal advisers as necessary.

A critical illness policy pays a lump sum for a variety of conditions, including those that cause permanent symptoms. In some cases, the tax-free payment reflects that an employee has a permanent disability that may prevent them from working long term. Policies define 'total permanent disability' in different ways. Some will only pay if an employee is unable to care for themselves. Others look at the job role and pay out if an employee can't continue in their usual job or another suitable role. This covers situations where an employee can keep working for your business but must switch to a lower-skilled or lower-paying job because of their illness. Others pay out if an employee can't continue in their usual trade. When buying a critical illness policy, consider what support you want to provide and whether the definition supports this.

A critical illness policy pays a lump sum when your employee is diagnosed with a specified critical illness that's listed on the policy. However, there are exceptions. As mentioned, each illness or injury must meet the diagnostic criteria set out in the policy's terms and conditions. Policies exclude chronic conditions that can be managed but not cured. Some illnesses or injuries only qualify if they'll cause ongoing permanent disability.

Policies also exclude pre-existing conditions. If an employee sought advice or treatment for a condition in the five years before they joined the policy, it'll be excluded from cover. Some insurers won't cover conditions that are passed down from previous generations. Once applied, an exclusion can be permanent, so check to see how exclusions work before you buy a policy.

A critical illness payment can provide your employees with a financial safety net and additional services, but it's also worth considering adding other types of protection to your employee benefits. These offer additional financial protection and access to a wider range of services.

Income protection insurance

The lump sum payout that critical illness insurance provides can cover an employee's day-to-day living expenses if needed. However, if they need to use the funds for other things, such as adaptations due to illness or disability, or face a prolonged absence from work, those funds could run short quickly. Group income protection insurance pays a percentage of an employee's usual salary during an absence from work due to illness or injury. Income protection payments typically continue for up to 2 years and can pay 50-80% of an employee's normal earnings. You'll process the payments through payroll, which means your employee also continues paying income tax and National Insurance contributions during their absence. By contrast, statutory sick pay (SSP) pays a maximum of £123.25 per week for up to 28 weeks, which could mean employees start to struggle financially after a short period.

Providing income protection insurance means your employees can pay their household bills and maintain their usual lifestyle while they recover. They're less likely to rush back to work for financial reasons before they've fully recovered. It also reduces the impact on their loved ones at a stressful time.

Health insurance

Critical illness insurance provides access to services aimed at improving employee wellness, as well as support during serious illness. However, it doesn't cover access to private medical treatment. Private medical insurance gives your employees quick access to private healthcare, which can support their recovery and return to work. Private healthcare providers pride themselves on investing in the latest medical advances, so members can benefit from cutting-edge technology or medication that isn't yet available on the NHS.

Critical illness cover provides some well-being services and resources, such as virtual GP appointments, telephone helplines, and EAPs, but medical insurance typically offers more. It can also include a comprehensive range of rehabilitation services to support your staff as they return to work. Most business health insurance provides employee health assessments as part of its well-being services.

Like critical illness cover, health insurance excludes chronic and pre-existing conditions, and also has standard exclusions. However, insurers will usually remove exclusions if an employee stays symptom-free for the first two years after joining the policy, which isn't always the case for critical illness insurance.

Group life insurance

Group life insurance provides a lump sum payment when an employee dies while employed by your business. The death doesn't have to be work-related. Life insurance pays out in most circumstances. However, exclusions still apply for deaths due to criminal behaviour, lifestyle choices such as drug use or participating in dangerous sports, or if an employee takes their own life.

Providing life cover ensures your employees' loved ones will be protected whether the death occurs suddenly or following a terminal diagnosis. If an employee also receives a critical illness payment, they can use it to make their final days more comfortable while knowing their family will be provided for when they're gone.

Adding group critical illness cover to your employee benefits supports your staff’s financial security and can provide vital support during challenging times. A combination of insurance policies can provide comprehensive coverage. Contact us for tailored advice to help you consider your options and make an informed choice.