Long-term illness can represent a substantial financial strain for both employers and employees. You can choose to either make payments directly to an individual or use the policy to fund payment for a limited period and then provide your company with a lump sum to fund a leaving service benefit.
Statistics show 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.
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 will be. 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.
Frequently Asked Questions
It is insurance taken out by an employer to provide income protection cover for employees.
Income Protection Benefit is the regular payment made by the insurance company to your employer. This is not an early retirement pension or an unemployment benefit and continued payment is dependent upon regular medical reviews to establish ongoing incapacity.
The insurance company will make benefit payments to your employer in accordance with the policy conditions. This will allow an employer to continue to pay you a proportion of the salary you were receiving prior to the date when your illness or disability occurred.
Yes. Your employer will deduct income tax and National Insurance contributions from the amount you receive.
Yes. Provided that the Jobcentre Plus (part of the Department for Work and Pensions) accept your claim you will receive your State Benefits. Any medical assessment required by the Jobcentre Plus will be separate to that required by the insurance company in processing and reviewing your claim under the Group Income Protection Scheme.
Yes. The insurance company will consider the payment of a proportionate benefit to top up earnings where only a graded or partial return to work is achieved or where a return to a lesser paid position is undertaken by you.
Your employer’s Group Income Protection Scheme allows them to make a claim where your further incapacity is due to the same or a related condition, lasts for more than one month and occurs within twelve months of your return to work.