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Group Income Protection
Group income protection (GIP) aims to provide an income to an employee when they are unable to work long term, as a result of an illness or injury. Payment usually starts after a set waiting period and can continue until the employee returns to work or, if earlier, the end of the policy.
Additionally GIP can provide a range of additional services to support your employees including rehabilitation services, such as counselling or physiotherapy, and can also provide partial benefits if an employee returns to work on a part-time basis.
It is designed to help employers by:
- Reducing the impact of long-term absence costs
- Help employees return to work sooner
- Enhancing your benefits package to help attract and retain employees
The Alan Boswell Group Difference
Alan Boswell Financial Planners are one the UK’s leading, truly independent, financial advisers providing a range of flexible employee benefit solutions for businesses.
We can help with all your employee benefits including: Workplace Pension/Auto-Enrolment Schemes, Group Income Protection Schemes, Death in Service Schemes, Critical Illness Schemes and Flexible Benefits
Group Income Protection in detail
Group income protection is a valuable benefit to both employer and employee.
- Long-term sickness can have an impact on business productivity. With cash-flow tied up in sick-pay you may be unable to re-recruit. An insurance policy that pays out under these circumstances can be an invaluable solution.
- For your employee, knowing that the cover is in place which protects their salary and helps provide rehabilitation services to enable them to return to work sooner provides peace of mind and generates substantial good-will towards their employer.
How does group income protection work?
GIP is very flexible. You can decide how much of an employee’s salary is covered, when the payments will start, how long they will last, and how they get paid.
- Salary Decide what percentage of your employee's salary is covered - usually up to a maximum limit.
- Start Decide when payments will commence - usually after six months of absenteeism.
- Finish Decide when payments end. This is usually when your employee returns to work or when the policy ends.
- Payments Payments are usually made to you to pass on to your employee.
GIP beneficiaries may also have access to a range of additional solutions to help them get back to work. Your policy may include an Employee Assistance Programme (EAP), providing absence and claims management tools, GP access, physiotherapy, 24/7 counselling support, and clinical rehabilitation support services.
FAQ's
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Yes, you can choose the level at which you set your GIP cover and is usually based on a % of an employee’s earnings. As an example you can set your GIP to pay out 50% of an employee’s salary, or 75%.
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Your premium payments to the insurance company are tax-deductible and treated as a business expense. The income received by an employee as a salary replacement is also taxable under PAYE.
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As an employer you don’t have any obligations to offer income protection insurance. But it is a very valuable benefit.
According to the ABI, one million workers a year find themselves unable to work due to a serious illness or injury and if something happens which means one of your employees couldn’t pay their bills it could be disastrous.
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