Running a business means relying on people. When an employee is ill, injured or dies, the impact isn’t just personal. It affects colleagues, customers and the business itself. Employee benefits help you support your team when it matters most. They also help you:
attract and keep good people
reduce disruption caused by long‑term absence
show that you take wellbeing seriously
For many businesses, employee benefits sit alongside business protection. One protects the business, the other protects the people inside it.
Employee benefits are insurance policies arranged by an employer to support employees and their families if something serious happens. The most common protection‑based employee benefits are:
Group life insurance (also called ‘death in service’)
Group critical illness cover
Group income protection
These benefits are usually paid for by the employer, offered to all eligible employees and set up with advice rather than bought online.
At LifeSearch, we can help you understand which benefits are right for your business and how to set them up properly.
Group life insurance pays a lump sum to an employee’s family, if they die while employed by the business. It’s one of the most widely offered employee benefits in the UK and is often the first benefit a small business puts in place.
How it works:
cover is based on a multiple of salary (for example, 2x or 4x)
the employer pays the premiums
payouts usually go to the employee’s chosen beneficiaries
Group life cover can provide reassurance to employees and their families, often at a relatively low cost to the business.
Group critical illness cover pays a lump sum to an employee if they are diagnosed with a serious illness listed in the policy and survive the required survival period.
This money can help employees:
cover everyday costs
make changes to their home or work
reduce financial pressure during recovery
How it works:
Cover applies only to illnesses defined in the policy, premiums are paid by the employer and payments go directly to the employee. Some policies also include cover for children or partners, depending on the insurer.
Group income protection pays an employee a regular income if they’re unable to work due to illness or injury. Rather than a one‑off payment, it provides ongoing support while someone is off work.
How it works:
typically pays a percentage of salary (often up to around 60–70%)
payments usually start after a deferred period
income continues until the employee returns to work, the policy limit is reached, or retirement
Many group income protection policies also include added‑value support, such as:
early intervention services
mental health support
physiotherapy
help returning to work safely
These services can sometimes be used even before a formal claim is made.
Employee benefits aren’t just for large employers. Small businesses often use them to compete with larger firms for talent and build trust and loyalty. They can help support employees, without managing things case‑by‑case and reduce the impact of long‑term sickness absence.
For employees, benefits offer reassurance. For employers, they offer structure and consistency.
Employee benefit premiums are usually paid by the employer. This can simplify administration, allow benefits to be offered fairly across the business and be more cost‑effective than employees arranging cover individually.
Tax treatment can vary depending on the benefit and how it’s set up, which is why advice matters.
Employee benefits and business protection serve different roles. Employee benefits support employees and their families. Business protection helps the business survive if a key person is lost.
Many small businesses use both. One to protect people, the other to protect the business itself.
Ask yourself:
Would a long‑term absence cause disruption for your team?
Would employees struggle financially if they were ill or injured?
Are you competing for skilled or experienced staff?
Do you want a consistent way to support employees fairly?
Could added support help people return to work sooner?
If you answered ‘yes’ to any of these, employee benefits are worth exploring.
Employee benefits aren’t something you usually buy online. Our expert LifeSearch advisers can help you understand which benefits suit your business size and budget. We’ll compare group life, critical illness and income protection options, and set policies up correctly from the start. And we can help explain benefits clearly to your employees.
You won’t get an instant online quote. From our real LifeSearch experts, you’ll get fee‑free advice that fits your business and your people.
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