What is Employee Benefit Insurance and why does your company need it?
Creating a workplace that supports employees takes more than just a salary. A way to show your employees that they’re valued is by offering employee benefit insurance. By providing financial protection, and boosting morale, a benefits package is now often seen as a necessity and not just a perk.
What is an employee benefit?
An employee benefit is any form of non-wage compensation provided to staff in addition to their regular salary. These can include everything from pension contributions, paid leave, health cover, income protection, and life insurance. While some benefits are required by law, many others are offered by employers voluntarily to strengthen employee wellbeing.
Employee insurance benefits, in particular, are designed to protect workers and their families from financial hardship in the event of illness or injury. These plans help bridge the gap between personal finances and unexpected uncertainties, giving staff peace of mind.
Types of Employee Benefits Insurance
There are various forms of employee benefit insurance, each tailored to support employees in different ways. Below are some of the most common types:
- Group Income Protection
A popular element of group employee benefits packages, this type of insurance provides a replacement income if an employee is unable to work due to illness or injury. Typically arranged and funded by the employers, Group Income Protection Insurance offers regular financial benefits after an agreed waiting period, supporting staff during long term absence and aiding return to work plans.
- Life Insurance
Also known as a death in service benefit, this policy pays out a tax-free lump sum to the employee’s chosen beneficiaries if they pass away whilst employed. It’s a straightforward way for employers to offer financial reassurance to staff and their loved ones.
- Critical Illness Cover
If an employee is diagnosed with a specific illness, a critical illness cover policy pays out a lump sum. The money can help cover treatment costs, make home adjustments, or support time off from work. While less common than income protection, some employers include this as part of a broader employee insurance benefits plan.
- Private Medical Insurance
Private medical insurance gives employees access to private healthcare services, often reducing waiting times for treatment and providing more flexibility in choosing care providers.
Which businesses are eligible for Employee Benefits Insurance in the UK?
If your business is registered in the UK, you can set up an insurance scheme to support your employees. Some plans may require a minimum number of staff, to be eligible for cover from the outset.
Are employers in the UK legally required to offer insurance as part of their benefits package?
Not always. While employee insurance benefits aren’t compulsory, they can play a valuable role in your overall rewards and benefits offering. Legally required group employee benefits in the UK typically include:
- Enrolment into a workplace pension
- Statutory maternity and paternity pay
- Paid holiday entitlement
- Statutory Sick Pay (SSP)
Which Employee Benefit Insurance options are most popular?
Health-related benefits tend to be the most popular among employers and employees alike. Following closely behind are covers such as life insurance, critical illness protection, and Group Income Protection insurance, all of which contribute to a more comprehensive and appealing group employee benefits package.
Why do companies offer Employee Benefit Insurance?
There are many reasons why businesses of all sizes choose to offer employee benefit insurance. These include:
Employee attraction and retention: In a competitive market, a strong group employee benefits package helps you stand out as an employer of choice.
Improved employee well-being: Financial stress is a common cause of anxiety. Providing cover such as Group Income Protection helps support your employees’ mental and financial well-being.
Reduced absenteeism: Offering benefits that support quicker recovery and return to work processes can help manage and reduce long-term absence from sickness.
Enhanced company culture: When employees feel cared for, they’re more likely to be engaged, motivated, and loyal.
Risk management: By offering employee insurance benefits, employers can better plan and manage the financial implications of staff illness or absence.
Want to explore Employee Benefit Insurance further?
If you're considering adding employee insurance benefits to your workplace offering, it's important to work with a provider that understands the needs of both your business and your people. Employing the services of a financial adviser will help ensure you get to see what’s available in the market and find the solutions that fit best with your business needs.
At Wiltshire Friendly, we specialise in employee benefits such as Group Income Protection, offering flexible options tailored to support both employers and staff. Speak to our friendly team today for tailored guidance.