Group Income Protection Assurance is designed to provide employers with a proportion of an employee’s income in the event they are off work for a prolonged period owing to illness.
In addition, many providers offer rehabilitation and support services with the aim of supporting employees on their return to work. These come at no extra cost and can be accessed at any time, i.e., a scheme member can use these whether or not they are off work.
Cover is usually a percentage of income (maximum is usually 80%) payable after a deferred period, which can be 13, 26 or 52 weeks. With a group scheme, the policy will have a Free Cover Limit; a level of the sum assured, which does not require any medical underwriting – the more scheme members, the higher the level.
The policy beneficiary is the employer, and it is designed so that they can still pay salaries of those on long-term sickness absence once the Statutory Sick Pay period has finished.
The rehabilitation services on offer via the insurer have proven results and are usually very successful in helping employees return to work.
Employers do not currently have any tax liability on the premiums, nor are they classified as a benefit-in-kind (P11D). As any claims are paid as ‘salary’, they are subject to income tax and National Insurance in the usual way.
Sickness absence is on the rise, especially post-pandemic and having a good quality group income protection policy in place provides peace of mind to employees and good commercial sense for employers.
Please contact us if this is of interest.