Group income protection enables employers to provide financial security to their staff by guaranteeing a replacement income during any long term absence from work as a result of illness or injury.
At present employers must pay statutory sick pay to any employee off work sick for up to 28 weeks. Group income protection can help reduce the considerable financial costs the business would incur as a result of paying it themselves. Benefits would be paid until the employee is able to return to work or until the policy ceases, usually when the employee reaches retirement. More often than not group income protection schemes also include access to rehabilitation services to encourage the recovery and return to work of the employee.
Not only is this protection policy beneficial to the employer financially but such a benefit is highly regarded by employees, helping to attract a higher caliber of staff.
The schemes are often far more cost effective than offering individual life insurance policies to employees.
Our financial advice is tailored to the needs of your business.
Employee benefits help to develop and promote positive employer-employee relations.
Potential for tax relief on the contributions made by the employer.
Group income protection can form part of an employee benefits package, along with other benefits such as group life insurance and pensions.
Not every employee that works for the employer has to be included in the group income protection cover. It may be that a policy only covers certain members of staff; such as Directors. You must however be aware of the implication of the Equality Act 2010, whereby it is illegal to discriminate against employees, job seekers or trainees on grounds of age.
You can choose to introduce a fixed probationary period for your employees before they are entitled to receive employee benefits such as group income protection.
Employees could also be assigned into suitable categories with an appropriate level of cover for each category. The more senior members of staff may be entitled to a greater benefit level or shorter deferred period than other staff.
Whilst income protection for individuals and companies does broadly the same thing, group income protection is a legal contract between a group of policyholders (often employees in a company) and the insurance company. The employer usually pays the premium and agrees the level of cover. With individual cover however, the policyholder usually pays the premium and decides on the level of income protection they need.
If you are searching for group income protection there are a few things you will need to think about, including levels of cover you wish to offer, and which groups of employees you want to make eligible for such benefits. We also recommend you use a specialist employee benefits consultant such as Endsleigh, who will be able to advise you on setting-up the most suitable and cost effective policy for both your company and its employees.