Group income protection
If your employees are unable to work, group income protection can provide financial support to them and your business.
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Our independent group income protection advisors are on hand to answer any questions and find the right policy for you. We work with all major UK providers, offering unbiased guidance on which option may best suited to you.
What is group income protection?
Group income protection is at its core a salary replacement insurance, providing an employee with financial and supportive services if they’re injured or fall ill and are unable to work.
However, as the product has evolved it has become an employee benefit that aims to support employees’ health and wellbeing by providing support like vocational rehabilitation and early intervention services, making group income protection more like an absence management partner then a traditional insurance.
Employees may receive a percentage of their basic annual salary if they’re unable to work in the long term, as well as having access to other health and wellness benefits. We’ve listed some examples that you may be able to receive below:
Why should you consider group income protection?
The health and wellbeing services may help to reduce long term absence and the associated costs to your company.
Your employees may benefit from the supportive services provided as part of the policy.
Offering group income protection as an employee benefit may demonstrate to your employees that you’re committed to their wellbeing.
Your employees may receive financial support during a difficult period of being injured or unwell.
Including group income protection in a benefits package may help to attract and retain talented employees.
You may be able to deduct the cost of this insurance from pretax profits.
How does group income protection work?
Group income protection is a policy that may come with several extras and supportive services alongside the cash payout to employees who are unable to work. If you’re a business, you’ll need to decide which services are most valuable to your workforce.
Group income protection for businesses
You are responsible for purchasing the policy and selecting a plan for your workforce, all payments are made by you.
Depending on the provider you select, your policy may include rehabilitation services, preventive care, health assessment, wellbeing apps and more.
You can choose which employees to cover under the scheme, either a selected group (providing there is a clearly defined eligibility), or the entire workforce.
You are responsible for communicating the plan to your employees and letting them know what it means for them, however, this is something we can help you with.
You may have flexibility over the payout your employees would receive if they’re unable to work. For example, this could be as little as 30% or as much as 80% of an employees salary.
You may choose to include covering employee pension and national insurance contributions in the event of a claim, as well as payout increases to protect against inflation.
Group income protection for employees
Depending on the provider, you may have access to rehabilitation and wellness services that aim to get you back to work sooner.
You may have access to preventative services that aim to improve your general health and reduce the risk of you being injured or falling ill.
Your family members may also have access to some of the additional value-added benefits of your policy.
You may have direct contact with a case manager who will work with you to help you get back to work sooner.
You are not responsible for paying the cost of the policy.
If you leave the company insuring you, your benefits will end.
You may receive financial support if you’re unable to work due to injury or illness. This may be subject to a deferment period, which could be as little as 8 weeks or as much as a year, before you receive any payments (depending on how the cover is set up).
Self-employed income protection
Income protection is also available to the self-employed, such as contractors who may want to cover themselves if they’re unable to work. Self-employed income protection works in a similar way, and its intended to provide financial safety in the form of replacing lost income. The key difference is that you’ll be purchasing policy for one person rather than a group of employees, and you may have more choice over the type of cover you receive.
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How much does group income protection cost?
The cost to provide group income protection as an employee benefit will depend on several factors ranging from how comprehensive your cover is to the number of employees being covered. The below are an example of the types of factors that will influence the price you pay:
How do group income protection claims work?
Your group income protection policy will outline the terms of your claims and what happens when an employee claims on the insurance. In the event an employee is unable to work due to illness or injury, the provider will assess what the cause is and determine if the claim is valid. If an employee does make a successful claim, below is an example of what may happen:
If a covered employee becomes injured or unwell, you report this to your provider, ideally after the 1st week of absence.
Depending on your policy and the reason for absence, they may be assigned a case worker who will aim to get them back to work.
If your employee is unable to return to work during the deferment period, they’ll start to receive payouts once the deferment period has ended if they continue to be unable to work.
Depending on whether you have a limited or unlimited term payment period, the payouts will continue until the employee returns to work up to a maximum amount of time, such as 2, 3 or 5 years.
The payment will be made from the provider via your payroll and will be subject to the normal income tax, national insurance and pension deduction.*
Speak to an independent insurance advisor
Get a quote*If it becomes clear that the employee is unlikely to return to work, the provider may be able to consider paying the claimant directly. However, this means they would no longer be an employee and would lose access to any other benefits offered.
Compare group income protection policies
Our advisors can help you compare group income protection policies available on the UK market. We offer an independent service with no obligation to purchase. Whether it’s to answer your questions or help you make the next step, let us know and we’ll be in touch.
What our advisors have to say about group income protection
“Providing group income protection may benefit both the business and its employees equally. It may reduce the costs of staff absences, as well as offering support to staff during difficult periods”
Group income protection FAQs
Why should a business get group income protection?
Can you combine group income protection with other insurances?
Do employees need to provide their medical information?
What is a deferment period?
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