A global pandemic has likely forced many business leaders, not to mention their staff, to rethink what employee benefits mean to them. Flexible working, great parental leave and occupational support are fantastic in their own right. But many of us are now realising the true value of decent Group Risk policies.
What is Group Risk?
Group Risk is an umbrella term used to describe a group of insurance products designed to support employees financially at a time when they may need it the most. These usually include Group Life Assurance, Group Income Protection and Group Critical Illness. We’ve noted some key elements to each product below.
Group Life Assurance:
- Pays out a specified amount to the beneficiary or beneficiaries of an employee in the event they pass away while employed at the company.
- Is often a multiplication of salary; usually two, three or four times.
- Sits outside of inheritance tax and usually provides a lump sum, that may be tax-free subject to certain criteria and the type of scheme.
- You can find out more about the nuances around Group Life payments here.
Group Income Protection:
- Is used to support an employee with a continued income during periods of illness, injury or disability.
- Can cover long-term sick pay.
- Is usually paid through payroll in the normal way.
Group Critical Illness:
- Pays a tax-free lump sum to an employee diagnosed with a serious medical condition from a pre-defined list.
- Can be extended to dependants of the employee.
- Is the fastest growing group risk benefit.
The rise of Group Risk payments
Last year saw the Group Risk industry deliver a record payout of £2.22 billion in claims. That’s an average of £6.1 million each day. This yearly total is up £208.4 million from 2020, showing a growing trend and need for Group Risk policies.
Both Group Life and Group Critical Illness products saw an increase on the total amounts paid last year (£1.57 billion and £106.3 million respectively) compared to 2020. Only Group Income Protection experienced a small decrease.
But the overall jump in total claims shows just how vital this kind of employee benefit is to staff at all levels, not just high-earners.
These insurance products not only provide valuable peace-of-mind to staff, but may also support them and their beneficiaries during what could be the most difficult periods of their lives.
Here at Brunsdon Financial, we recognise that, while a difficult topic to consider, providing insurance against illness or death is a benefit valued across the board. We can help create an employee benefits package that is there for your staff when they need it the most and is in line with your employee support strategies.