Group Income Protection is an insurance policy that is taken out by an employer which part funds the absence of an employee through sickness, injury or illness. Sickness absence causes major disruption for many companies and employers are just as reliant on their employees to maintain their business as employees are on the employer to maintain their lifestyle. A group income protection policy provides a monthly replacement income for the employee. Some policies also allow access to rehabilitation services to help the employee to get back to work as quickly as possible. Cover can start after a short term sick pay scheme has ended, can cover any percentage of salary up to a maximum of 75% and can pay out for a minimum of 2 years right through to retirement age. The cost of a policy on average is usually around 1.5% of payroll and when you compare this to research carried out by Unum, which found that sickness absence can cost up to 16% of payroll, then it is a very sensible way to protect your business and your employees.

But as an employer what are the benefits of a Group Income Protection Policy to me and to my employees?

For the employer:

• It is difficult to predict the cost to your company of long term sickness absence (the Confederation of British Industry estimates that sickness absence costs UK business £13.4 billion each year). By having a scheme of this type in place you can reduce this cost and more accurately predict how it is affecting your business.
• It allows your company to pay a percentage of an employee’s salary beyond the end of a statutory sick pay scheme.
• It can help your company adhere to the Disability Discrimination Act by helping assist the return to work of disabled employees.
• If the policy has a rehabilitation service, this can help with reducing permanent absences or early retirements due to ill health.
• It can be part of an attractive benefits package that helps to retain or attract high calibre employees to your business.

For the employee:

• It provides them with peace of mind and financial security, knowing that an income will continue to be received whilst they make try to make a full recovery from their illness, sickness or injury.
• There is no need to rely on State Benefits which might not be applicable to the individual if they are able to fulfil “any job” criteria.
• Usually an employee who is long term sick wants to return to work (and a normal way of life) as soon as possible. If the scheme has a rehabilitation service, this increases the chances of that employee returning to work quicker and contributing to the success of your business.
• As the employee is still on the payroll, there is no break in service, therefore they will be able to continue to receive service related benefits (for example – pension contributions which can be covered under the scheme).

So what do I need to provide to set up a scheme?

Preferably we would like to discuss your requirements before hand, but as a quick guide the type of information you would normally need to provide include:

• A fully completed employer application form
• A full membership list including date of birth, salary, occupation and business postcode

Is there anything else I need to consider?

There needs to be a minimum of 5 lives in order to have a Gross Pay scheme, and a minimum of 20 lives to have a Gross Pay scheme that includes a capital option, fully integrated benefits or net pay options. The cost of the policy is usually treated as a trading expense and the premiums are usually not taxed as a benefit in kind for the employee. All eligible members must be included when they become eligible (for example after a number of months / years service). All benefits are payable to the employer. You can choose different levels of cover for different categories of staff, rewarding people for length of service or for achieving promotion to a certain grade / position.

Who do I need to contact to discuss my requirements in more detail?

We have given you two choices, you can either complete the short enquiry form below or you can call us on 01274 516900, where a group risk adviser will be delighted to help you with any questions. We look forward to speaking to you soon.