Group Insurance NZ
Comprehensive employee benefits: life, income protection, health, and trauma cover. Attract and retain top talent. From $45/employee/month.
What is Group Insurance?
Group insurance (also called employee benefits or group schemes) provides life, health, income protection, and trauma insurance to your employees as part of their employment package. Employers typically pay all or part of the premiums, creating a valuable benefit that helps attract and retain quality staff.
In New Zealand, group insurance is a tax-effective way to provide meaningful financial protection to your team. Premiums are usually tax-deductible as a business expense, and modern group schemes are flexible, allowing employees to choose coverage levels that suit their needs.
Why Group Insurance Matters for NZ Businesses:
73% of NZ employees say employee benefits influence their decision to join or stay with an employer. Group insurance costs 20-40% less than individual policies due to group discounts and simplified underwriting. For many employees, workplace group insurance is their only financial protection—making it a highly valued benefit.
Types of Group Insurance Coverage
Group Life Insurance
Provides a lump sum payment to employees' families if they die while employed. Typical coverage: 1-4x annual salary. Essential for employees with dependents and financial obligations.
Typical cost: $15-$35/employee/month for $100k-$200k cover
Group Income Protection
Replaces 75% of salary if employee can't work due to illness or injury. Most valuable benefit for employees. Payments continue until recovery, retirement, or end of benefit period (typically 2-5 years).
Typical cost: $25-$55/employee/month depending on occupation and benefit period
Group Trauma Insurance
Lump sum payment if employee suffers a critical illness like heart attack, stroke, or cancer. Helps cover medical costs, mortgage payments, and living expenses during recovery. Typically covers 35-40 specified conditions.
Typical cost: $20-$45/employee/month for $50k-$100k cover
Group Medical Insurance
Covers private medical treatment, specialists, surgery, and diagnostic tests. Reduces wait times and provides faster access to healthcare. Increasingly popular as public health wait times extend.
Typical cost: $45-$95/employee/month depending on age and coverage level
Benefits for Employers
Attract Better Candidates
Competitive salary alone isn't enough—candidates compare total packages. Group insurance makes job offers more attractive, especially to experienced professionals with families.
Improve Retention
Employees with valuable benefits are less likely to leave. Group insurance becomes more valuable as employees age, creating a retention mechanism that strengthens over time.
Tax Deductible
Group insurance premiums are tax-deductible business expenses. For businesses in the 28% tax bracket, the net cost is ~28% lower than the gross premium paid.
Group Discounts
Group policies cost 20-40% less than equivalent individual cover due to group discounts, simplified underwriting, and administrative efficiencies.
Simplified Underwriting
Employees with pre-existing conditions often get cover they couldn't obtain individually. Free cover limits (typically $100k-$250k) require no medical questions.
Demonstrate Care
Providing financial protection shows you care about employees' wellbeing and their families. This builds loyalty, trust, and positive workplace culture.
Group Insurance Costs in New Zealand
Costs vary by coverage type, employee demographics, and benefit levels. Here are typical monthly costs per employee:
| Coverage Type | Benefit Amount | Monthly Cost/Employee |
|---|---|---|
| Life Insurance | $100,000 | $15 - $25 |
| Life Insurance | $200,000 | $25 - $35 |
| Income Protection (75% salary, 2 yr) | Up to $60k salary | $25 - $40 |
| Income Protection (75% salary, 5 yr) | Up to $60k salary | $40 - $55 |
| Trauma Insurance | $50,000 | $20 - $35 |
| Medical Insurance (standard) | $50k annual limit | $45 - $75 |
| Medical Insurance (comprehensive) | $100k annual limit | $75 - $95 |
Example Package Costs
For a business with 20 employees, typical annual group insurance costs:
- • Basic Package (Life $100k + Income Protection): $40-65/employee/month = $9,600-15,600/year
- • Standard Package (Life $150k + Income Protection + Trauma $50k): $60-95/employee/month = $14,400-22,800/year
- • Comprehensive Package (Life $200k + Income Protection + Trauma $100k + Medical): $110-165/employee/month = $26,400-39,600/year
After tax deduction (28% rate): Net cost is approximately 72% of gross premium.
Top Group Insurance Providers in NZ
Compare quotes from these leading New Zealand group insurance providers:
Southern Cross
NZ's largest health insurer with comprehensive group medical and life insurance options. Excellent for businesses wanting medical cover as primary benefit. Strong nationwide network.
Best for: Medical insurance focus, medium-large employers
AMP
Specialist in group life, income protection, and trauma insurance. Flexible schemes for businesses of all sizes. Competitive pricing and strong claims support.
Best for: Life and income protection, SMEs, flexible schemes
Partners Life
Innovative group insurance provider with modern digital platforms. Great for tech-savvy businesses. Flexible benefits allowing employee choice.
Best for: Tech companies, flexible benefits, employee choice
AIA
Pan-Asian insurer with strong group insurance capabilities. Good for larger employers and businesses with international presence. Wellness programs included.
Best for: Large employers, international businesses, wellness focus
Fidelity Life
NZ-owned insurer with competitive group life and income protection. Strong focus on customer service. Good for businesses wanting local provider.
Best for: NZ-owned preference, small-medium businesses
nib
Health insurance specialist offering group medical and wellbeing programs. Growing presence in NZ market with competitive pricing for health cover.
Best for: Health insurance, wellbeing programs, cost-conscious employers
Frequently Asked Questions
What's the minimum number of employees for group insurance?
Most NZ insurers require a minimum of 5 employees for group insurance schemes, though some providers offer schemes from 3 employees. The more employees you have, the better the pricing and more favorable the terms. Businesses with 20+ employees get the best rates and most flexible options.
Do we have to cover all employees?
Generally yes—insurers typically require you to offer cover to all full-time permanent employees (or at least 75% participation rate). This prevents adverse selection where only high-risk employees join. However, you can have different benefit levels for different groups (e.g., management vs staff), and employees can usually opt out if they choose.
What happens if an employee leaves?
When an employee leaves, their group insurance typically ends. However, most NZ group policies include a "continuation option" allowing exiting employees to convert to an individual policy (usually within 30 days) without new medical underwriting. This is valuable for employees with health issues who might struggle to get individual cover.
Are group insurance premiums tax deductible?
Yes, employer-paid group insurance premiums are generally tax-deductible as a business expense. However, the benefit may be treated as taxable income for employees in some circumstances (particularly for medical insurance). Life and income protection provided as part of a registered superannuation scheme may have different tax treatment. Consult your accountant for specific advice on your situation.
What's the difference between contributory and non-contributory schemes?
Non-contributory: Employer pays 100% of premiums. Simpler to administer, higher participation rates, stronger benefit for employees. Contributory: Employees pay part of the premium (typically 25-50%). Lower cost for employer, but may reduce participation. Allows employees to choose higher benefit levels. Most NZ employers use non-contributory for core benefits (life, income protection) and contributory for optional add-ons (medical, higher trauma cover).
How does underwriting work for group insurance?
Group insurance uses simplified underwriting. Each policy has a "Free Cover Limit" (FCL)—typically $100k-$250k—where employees get automatic cover without medical questions. Above the FCL, medical evidence is required. For new employees, cover usually starts from day one up to the FCL, with higher amounts subject to individual underwriting. Pre-existing conditions may be excluded or have waiting periods, but the terms are generally more favorable than individual insurance.
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Attract and Retain Top Talent
Provide valuable employee benefits with group insurance. Tax-deductible premiums from $45/employee/month.
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