As Australia’s workforce becomes more diverse and financially savvy, employers are under pressure to offer benefits that not only attract talent but genuinely support employee wellbeing. Enter the Group Universal Life Policy (GULP)—a flexible, tax-effective insurance solution that’s quietly transforming the employee benefits landscape in 2025. But what exactly is a GULP, how do they work, and are they right for your business or personal portfolio?
What Is a Group Universal Life Policy (GULP)?
A Group Universal Life Policy is a type of life insurance offered to employees as part of a corporate benefits package. Unlike traditional group life insurance, which usually offers a flat death benefit, GULPs combine life cover with a cash value component—giving employees the option to build savings within their policy.
- Flexibility: Employees can adjust their coverage and contributions based on changing needs.
- Portability: Policies are often portable, meaning employees can take them if they leave the employer.
- Tax Benefits: Premiums may be paid from pre-tax salary, and investment growth inside the policy is generally tax-deferred.
In 2025, GULPs are gaining momentum in Australia as employers seek to differentiate their benefits packages and help workers bridge the growing life insurance gap.
How GULPs Work: Structure and Features in 2025
Here’s how a typical GULP operates in the Australian context:
- Employer-Group Arrangement: The employer negotiates a master policy with an insurer. Employees then opt in to individual coverage under that umbrella.
- Customisable Cover: Employees choose the amount of cover they want, within set limits. They can also make extra contributions to build a cash value component.
- Tax Efficiency: Recent 2025 updates to the ATO’s guidance allow salary-sacrifice contributions to GULPs up to an annual cap, making these policies more attractive for high-income earners seeking tax-effective wealth building.
- Investment Options: Many GULPs in 2025 offer a range of investment choices—such as fixed interest, balanced, or growth portfolios—mirroring the flexibility of superannuation funds but with added insurance benefits.
Consider this real-world scenario: an employee at a mid-sized tech firm in Melbourne opts into their company’s GULP. She chooses a $500,000 death benefit and contributes an extra $200 per month into the policy’s cash value, selecting a balanced investment option. If she leaves the company, she can take the policy (and its built-up value) with her—providing both financial security and savings flexibility.
Who Benefits Most? Employees, Employers, and Policy Trends
GULPs offer distinct advantages, but they’re not for everyone. Here’s who stands to gain the most:
- Employees:
- Mid-to-high income earners looking for tax-effective insurance and savings outside of superannuation.
- Workers with variable incomes (e.g. contractors or sales staff) who want to adjust coverage year-to-year.
- Anyone seeking portable, flexible life cover that can adapt to career or lifestyle changes.
- Employers:
- Companies looking to boost employee retention with a high-value, low-cost benefit.
- Organisations seeking to stand out in competitive talent markets—especially in finance, tech, and healthcare.
- Firms aiming to support employee financial wellbeing as part of an ESG or wellbeing strategy.
2025 Policy Trend: The latest APRA data shows a 17% year-on-year increase in group life insurance uptake, with GULPs representing a growing share thanks to new ATO rulings on concessional tax treatment for voluntary contributions. Several major insurers—including MLC Life and TAL—have launched digital-first GULP offerings tailored for remote and hybrid workplaces.
Risks, Considerations, and the Future of GULPs in Australia
No financial product is perfect. Here’s what to watch out for with GULPs:
- Costs: Fees can erode returns in the cash value component. Compare options and scrutinise fee structures.
- Complexity: GULPs are more complex than basic group life insurance—employees should understand the investment risks and policy terms.
- Legislative Changes: While 2025 has seen favourable tax policy updates, the regulatory environment for insurance and employee benefits remains dynamic.
Looking ahead, expect GULPs to become a core part of the Australian employee benefits mix, especially as more workers demand benefits that bridge the gap between insurance and savings. Digital onboarding, robo-advice for selecting cover levels, and integration with broader financial wellness programs are all trends to watch in the next 12–24 months.
