How Group Life Insurance Works in Kenya: Everything HR Managers Need to Know

In today’s competitive workplace, employee benefits are no longer just “extras” — they are a key factor in attracting, motivating, and retaining talent. Among these benefits, Group Life Insurance has become one of the most valuable protections employers can offer their teams.

But what exactly is Group Life Insurance? How does it work in Kenya? And what should HR managers, business owners, and decision-makers keep in mind when setting up a policy?

This guide breaks it all down — Step by Step.

What is Group Life Insurance?

Group Life Insurance (GLI) is a life insurance policy arranged by an employer (or organization) to provide financial protection to employees’ families in case of death.

Instead of each employee buying individual life insurance, the employer negotiates one collective policy that covers everyone in the group.

💡 In simple terms: If an employee passes away while covered under the policy, their beneficiaries receive a lump-sum payout.

Why Group Life Insurance Matters in Kenya

In Kenya, families often rely heavily on breadwinners for daily expenses, school fees, and healthcare. When death strikes, the financial strain can be devastating.

This is where GLI comes in — it provides:

How Group Life Insurance Works in Kenya

Here’s a step-by-step breakdown for HR managers:

Employer Sets Up the Policy

The organization partners with an insurance intermediary (like Step by Step Insurance) to design a group cover.

Eligibility

Usually covers all permanent employees (sometimes including spouses and children).

Sum Assured (Coverage Level)

This is typically a multiple of the employee’s annual salary (e.g., 2x or 3x gross salary). For example:

Employee earning KES 1,200,000 annually → 2x salary = KES 2,400,000 payout

Premium Payment

Premiums are either:

• Paid fully by the employer (most common)
• Shared between employer and employees

Payouts

If an insured employee dies, the family receives the agreed lump sum (free of tax in Kenya).

Benefits of Group Life Insurance for Employers

Offering GLI provides more than financial coverage — it also strengthens HR strategy.

What’s Covered Under Group Life Insurance in Kenya

Typical benefits include:

Coverage Type	Description
Death (natural or accidental)	Lump sum payout to beneficiaries
Funeral/Last Expense Cover	Immediate cash to help with burial expenses
Accidental Death & Dismemberment	Compensation in case of severe disability
Critical Illness Rider (optional)	Payout if diagnosed with a serious illness

👉 Note: The exact benefits depend on the insurer and plan design. That’s why working with a trusted intermediary is key.

Common Mistakes HR Managers Make (and How to Avoid Them)

How Much Does Group Life Insurance Cost in Kenya?

The cost depends on:

• Number of employees covered
• Average age of employees
• Level of benefits (e.g., 2x salary vs 4x salary)
• Riders included (funeral, disability, illness)

💡 Example: A company with 50 employees, each earning an average salary of KES 800,000, could get a 2x salary cover (KES 1.6M per employee) at affordable annual premiums.

At Step by Step Insurance, we help employers compare quotes from multiple insurers to ensure cost efficiency and maximum protection. Learn more about our specialized plans for small and medium businesses.

Why Work With Step by Step Insurance?

As an independent insurance intermediary, Step by Step Insurance doesn’t just sell policies — we advise, negotiate, and support HR managers throughout the process.

Final Thoughts

Group Life Insurance is not just another HR cost. It’s a strategic investment in your people — one that builds trust, loyalty, and resilience for both employees and employers.

For Kenyan HR managers, the question is no longer “Should we get Group Life Insurance?” — it’s “Can we afford not to?”