Group Income Protection Insurance
What is Group Income Protection Insurance?
Group Income Protection pays a proportion of employees salary if they are off work due to accident or illness for a prolonged period. Having Group Income Protection gives both employer and employee peace of mind during what can be a difficult time.
Why Should Companies Consider Group Income Protection?
The Confederation of British Industry has estimated that sickness absence costs UK business £13.2 billion each year.
In 2007, sick leave and absenteeism cost UK industry:
• £13.2 billion*
• 172 million working days*
• an average of 6.7 sick days per employee*
*Source: CBI/AXA absence and labour turnover survey 2008, Confederation of British Industry
Statistics like these mean that sickness and absenteeism can place an enormous strain on company financial resources. Group Income Protection helps the employer to manage long term sickness more effectively. At the same time employees feel that they have the support of their employer during a very stressful time.
Normally companies will continue to pay employees during a time of sickness but this time is discretionary. There comes a time when the employer has to make the decision to cease payments to the employee which can be very awkward especially if the employee has been a long standing member of staff who has contributed much to the success of the company. This then destroys the relationship between employer and employee. Group Income Protection stops this scenario from happening.
Who Benefits From Group Income Protection?
The company offering the policy benefits in the following ways:-
- Employer/employee relations are strengthened in that both feel supported by each other
- The company can provide financial assistance to employees at a reasonable cost
- The company can manage the cost of sickness and absenteeism more effectively
- The premiums for the policy enjoy tax relief on contributions
- Company pension scheme contributions and employer NI contributions can also be included
- The company can benefit from policy provider rehabilitation schemes.
The employee benefits in the following ways:-
- Continued sick pay when it is really needed
- Support and reassurance from the company
- Rehabilitation scheme provided by the insurer
- No benefit in kind tax penalties
Product Features
Group Income Protection can be set up with a deferred period of 13, 26, 28, 41, 52 and 104 weeks. The longer the deferred period the lower the premium. Typically the cost of providing Group Income Protection is usually between 0.5% -1.5% of payroll but largely depends on the type of business. White collar workers are cheaper to insure. The policy is very flexible in how it is set up. Indexation, Pension contributions, NI contributions salary limitations can be included. Most policies offer minimal administration set up and it is common that only the higher earners need medical underwriting.
How Do We Help You?
Unlike most insurances, Group Income Protection can be a negotiable product with regards to premium and terms. From our initial discussions/meetings we then approach a selection of insurers who we feel will offer you the most appropriate policy to your needs. We then negotiate with these insurers to obtain the best premium and terms possible for you. Even after the policy has commenced we review your arrangements annually to see if better terms can be obtained. Because Group Income Protection is so flexible and covers so many people within your organization it is important that we maintain a close relationship and keep each other aware of any changes that may have happened such as addition of staff members etc.