Business (Group) Income Protection (GIP)

A Group Income Protection policy protects an employees’ salary should they be unable to work due to illness or injury. Most policies provide a percentage of the employee’s gross pay which is paid gross and as the employer you deduct tax and National Insurance before passing it on to the employee as pay. 

As an employer a GIP policy will help you to manage the implications of long term absence as most policies have an associated occupational health service to help your employee through a difficult time with the aim of getting them back in to the workplace.

a highly valued employee benefit which assists in the retention and attraction of staff

GIP is a highly valued employee benefit which assists in the retention and attraction of staff.

We can assist you to tailor the right benefit package to meet the needs of your business and your employees.

Statutory Sick Pay (SSP)

(https://www.gov.uk/statutory-sick-pay/overview)

Provided they satisfy the qualification criteria employees can get £88.45 per week SSP for up to 28 weeks if they are too ill to work. You pay this directly in the same way as you normally pay wages or salary.

For the majority of people this level of income will lead to financial hardship which is where the extra support of a GIP will prove so useful to them.

GIP Options for you to consider.

% of salary to pay.

The higher the level of pay that your policy covers the higher the premium will be. Most plans are set between 50% and 75%.

Deferment period

This is the length of time delay between the first day of absence and the insurer making the first payment. The longer the delay the lower the premium will be.

Inflation

It is possible that some claims could be paid out over a long period and to protect against the erosion of the value of the benefit caused by general price inflation benefits can be indexed to increase in line with the increase of prices in the economy.

National Insurance (NI) and pension contributions

Bearing in mind that benefits are paid by the insurer to you the employee you will retain any obligation to pay NI and pension contributions.

There is usually an option to cover these addition costs via the policy.

The average age of your workforce

As we age unfortunately the risk of ill health increases and hence the risk to the insurer of paying out for an income protection claim also increases.

The average age of your staff will have an impact on the premium charged.

Type of occupation

The industry that you work in will also be a factor that influences the premium charged. Some activities are more physically demanding whilst others put additional stresses and strains on people that can lead to mental health problems. Stress is seen more and more as a consequence of the modern workplace.