Group Income Protection is designed to protect both employer and employee from the financial consequences of long-term absence.

Whether used as part of a comprehensive employee benefits package, or on its own, this valuable benefit is designed to provide a financial support of a proportion of income replacement for employees if they are unfortunate enough to be unable to work for an extended period, due to illness and/or injury.

Importantly this is not just an insurance designed to kick in after a defined period of absence. Moreover, it can provide invaluable employee rehabilitation and support services as both prevention and cure (i.e. Employee Assistance ‘EAP’ programmes) to help ensure employees get all the help they need to return to work as soon as possible and, ideally, access to support services at the earliest possible opportunity to prevent absences occurring in the first place.

Group Income Protection is used by employers:

  • To help manage sickness and the associated costs. Insurer rehabilitation support can help employees get back to health and back to work – reducing the length of sickness absence and the impact on a business.
  • As an employee benefit to provide continued income for sick and incapacitated employees, helping to relieve money worries at a difficult time. This can boost morale and help attract and retain the right calibre of staff – factors that are essential to business growth.

Benefits are normally based on an employee’s earnings, with options available to meet the employer’s specific needs and budget.

A range of cover options enables employers to mix and match benefits, tailored to their exact needs and also to contain and/or limit costs.

The scheme benefit is normally paid to the employer and passed to the employee through the PAYE payroll system. Generally, premiums paid by an employer can be offset against corporation tax and are not regarded as a P11d benefit in kind for the employees, rather they are taxed as earned income.

Payment of the claim benefit is also dependent upon initial and regular medical reviews to establish an employee’s ongoing inability to work. It is important to note that this is not an early retirement pension or unemployment benefit.