Group income protection - a valuable benefit for your team members

Tuesday 28th January 2020

Group income protection - a valuable benefit for your team members

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Article By Jan Bailey

Group income protection - a valuable benefit for your team members

According to recent research, financial stress is the top concern affecting many millennial workers. In a poll of 500 HR decision makers, 51% cited stress and anxiety related to finances and debt as their top concern. Many middle managers are faced not only with the traditional pressures of supporting their children, paying mortgages and bills but also having to pay off accumulated student debt. If they are forced to take time off due to long term illness or injury, they worry how they would meet their financial commitments. In fact, when asked: ‘How long could you survive financially without your main household income?’ over half of respondents said less than three months.

At an annual average of 4.3 sick days per worker, employee sickness rate is in fact at its lowest since records began. Nevertheless, the risk of being incapacitated due to long term mental or physical illness or injury could be mitigated by Income Protection Insurance. As an employer, a Group Income Protection policy could provide your staff with an attractive additional benefit and help reduce financial stress.

Group Income Protection can provide a replacement income to your employees should they not be able to work due to illness or injury for a prolonged period of time (usually 13 weeks or more in our policies). Typically, the insurer will pay a defined percentage of the employee’s salary – usually around 50-75% - until they are well enough to return to work or reach the end of the period insured under the policy, whichever is sooner.

Group Income Protection Insurance is not a P11D benefit and employers can usually get corporation tax relief on premiums. Premiums are generally relatively low, yet the benefits in terms of reassurance for your team members will be high. Of particular benefit to SME businesses (who often do not have a dedicated HR Manager) is that they will not have to monitor and manage employees’ long term sickness absence as this will be undertaken on their behalf by the insurer.

As with any group scheme, it’s important that employers ensure that Group Income Protection benefits are carefully and appropriately communicated to employees. Any literature issued to employees by the employer must be consistent with policy documentation issued by the insurance provider. That’s because if literature issued by the employer offers more protection than is offered under the policy, employers may be required to fund any uninsured liability.

Your Brunsdon Employee Benefits Consultant can guide you through all of these considerations and everything else you need to know about introducing or reviewing your Group Income Protection Insurance scheme. As we are not tied to any particular product provider, your interests will be uppermost.