Group Life Insurance

What is group life insurance?

Group life insurance is when a single insurance contract covers a group of people. In Australia, these are typically employees of a large-scale business or organisation, or members of a super fund.

Unlike other life insurance cover, they typically don't require much personal information on each person's health status. Instead, a series of assumptions are made on the health condition of the collective group.

The payouts are usually lower than standard life insurance policies but premiums are cheaper thanks to a "bulk discount".

What is the difference between life insurance and group life insurance?

Group life insurance

Group life insurance is usually provided by an employer or super fund. Policies are bought in bulk so are generally cheaper. However, the payouts are often lower and the benefits smaller. Payments are often deducted from your salary or included in your income package.

Life insurance

Standalone or individual life insurance cover is something you buy directly from an insurer or broker yourself. Unlike group life insurance, you'll be asked questions about your health, occupation and lifestyle. As a result, the payouts are generally bigger and the benefits are better – but it's usually more expensive.

Group life insurance vs individual cover

How are group life insurance premiums paid?

These are the 2 main ways group life insurance premiums are generally paid:

Through your super

Premiums are automatically deducted from your superannuation contributions on a monthly basis, eating into your retirement savings but it's one less bill coming out of your bank account.

By you or your employer

Many employers pay the full premiums to make a more competitive offer; others will require you to pay it yourself. Some employers and employees will share the costs as part of a salary sacrifice arrangement.

What happens to my group life insurance if I change jobs?

It's likely that you'll lose your life insurance cover. This is because group life insurance often isn't transferable since the policies were bought in bulk. If you're worried about losing cover, speak to your employer and see if you can make an arrangement with them.

How do I get group life insurance?

You'll commonly find group life insurance offered:

• Through super. Group life insurance in Australia largely consists of policies taken out through compulsory superannuation.
• Through employees remuneration. It can be a competitive addition to employee remuneration packages and can also help protect workers.
• As part of a union membership. Some worker bodies such as unions and associations also offer group life insurance to their members to attract and keep members.

Pros and cons of group life insurance

FAQs about group life insurance

• Who is eligible for group life insurance in Australia?

  Group life insurance is typically offered to specific groups rather than individuals. Eligibility usually extends to employees of a business or organisation, members of a superannuation fund, or members of a union or association.

• What types of cover are typically included in group life insurance policies?

  The most common type of cover in a group policy is death cover. Many policies also include Total and Permanent Disability (TPD) cover. Group income protection is also available through some employers or super funds. Critical illness cover is less commonly included in standard group policies.

• How much cover can I expect from a group life insurance policy?

  Group life insurance generally offers lower levels of cover compared to individual policies. Payouts are often set as a multiple of your annual salary, for example, one or two times your salary. The maximum cover limits vary significantly between providers, employers, and super funds.

• Can I convert my group life insurance to an individual policy if I leave my job or super fund?

  Generally, group life insurance policies are not directly transferable or convertible to an individual policy. If you change jobs or super funds, you will typically lose your existing group cover. Some providers may offer a limited window to apply for new individual cover without a full medical assessment, but this is not a standard feature.

• How do I make a claim on a group life insurance policy?

  To make a claim on a group life insurance policy, you or your beneficiary should contact your employer or superannuation fund directly. They will provide the necessary claim forms and guide you through the process. You will typically need to submit supporting documentation such as medical reports or death certificates.

• Are there situations where a group life insurance claim might be denied?

  Yes. A group life insurance claim may be denied if the policy was not active at the time of the event, if exclusions for specific causes such as self-inflicted injury or certain high-risk activities apply, or if essential information was withheld when the cover was initiated. It is important to review the policy's Product Disclosure Statement (PDS) for full details.

_{The information on tax above general in nature only, and only applies to life insurance offered by employers as part of a remuneration package, and owned by the employer. Conditions may vary depending on which types of cover are included in the policy being offered. It can be a good idea to speak with a specialist to see how it may apply to the policy you are offering employees and your business' circumstances.}

Written by

Gary Ross Hunter

Journalist

Gary Ross Hunter has over 6 years of expertise writing about insurance, including life, health, home, and car insurance. Having reviewed hundreds of product disclosure statements and published over 800 articles, he loves simplifying complex insurance topics for everyday readers. Gary has contributed to major outlets like Yahoo Finance, The Sydney Morning Herald, and news.com.au, and holds a Bachelor of Arts (Honours) in English Literature from the University of Glasgow, along with a Tier 2 General Advice certification, ensuring his work adheres to ASIC’s RG146 standards. See full bio

Gary Ross's expertise

Gary Ross has written 572 Finder guides across topics including:

• Health, home, life, car, pet and travel insurance
• Managing the cost of living

Co-written by

James Martin

Journalist

James Martin was the insurance editor at Finder. He has written on a range of insurance and finance topics for over 7 years. James often shares his insurance expertise as a media spokesperson and has appeared on Prime 7 News, Insurance News, 7NEWS and The Guardian. An experienced journalist, James' work has featured in publications including The Irish Times, Companies100 and In Business. He holds a Tier 1 General Insurance (General Advice) certification and a Tier 1 Generic Knowledge certification, both of which meet the requirements of ASIC Regulatory Guide 146 (RG146). See full bio

James's expertise

James has written 181 Finder guides across topics including:

• Car, home, life, health, travel and pet insurance
• Managing the cost of living
• Money-saving tips