Group Income Protection

Look after your business and your staff

 

Group Income Protection Insurance

 

A leave of absence due to sickness or injury can be a difficult and stressful experience, for both the employee and the employer. You don’t want your employee to worry about money and try to return to work before they’re fit, but equally you wouldn’t want to be paying a staff cost for a job that isn’t being done. A Group Income Protection policy can offer your employees some financial security and offer you, the employer, some financial protection whilst not necessarily breaking the bank.

 

Group Income Protection is designed to help both employers and employees in the event of sick leave. When an employee is unable to work due to illness or injury, Group Income Protection insurance will pay an agreed proportion of their income.

 

 

Have a specialist insurer on your side

 

At Wiltshire Friendly Society we have decades of experience in income protection and help our clients to understand what Group Income Protection is, how it works and what the benefits of income protection insurance are for small, medium and larger businesses.

 

 

Contact Wiltshire Friendly today

 

 

What are the two different types of Group Income Protection insurance?

 

Employees are a business’s greatest asset. Group Income Protection is a valuable benefit to attract and retain employees, which is becoming increasingly important. Designed to help employers support sickness absence more effectively, Group Income Protection insurance usually pays up to 75% of an employee’s income if their illness or injury prevents them from working.

 

Employer funded Group Income Protection

 

Employer funded Group Income Protection enables you as an employer to pay employees a proportion of their earnings if they are unable to work due to illness or accident.

 

In this type of Group Income Protection, the income replacement benefit is claimed by and paid to you the employer, before being passed on to the employee through normal payroll.

 

Employer funded income protection not only shows your employees that you care about their wellbeing, but can also help you to meet your financial and legal obligations, such as Statutory Sick Pay and your own sickness scheme financial liability.

 

You select the level of protection you want to provide to your employees, based on their earnings. At Wiltshire Friendly, our plans have been designed so that you are able to choose from a range of features and cost-related options to fit within your business and employee requirements.

 

The maximum benefit you can insure for each employee is 75% of their total earnings, up to a maximum sum insured of £180,000. This can be paid for any length of time from 6 months until the employee reaches state pension age. Benefit payment will stop when the individual returns to work.

 

If an employee is not fully able to return to work, such as partial rehabilitation, the benefit may still be payable on a proportionate basis.

 

Group Income Protection premiums paid for by the employer are normally treated as a deductible business expense. Benefit received under a claim is classed as business income and is taxable and when paid under PAYE to an employee is a trading expense, hence tax neutral. (Based on current legislation and HMRC practice.)

 

Employee funded Group Income Protection

 

Employer funded Group Income Protection enables you as an employer to pay employees a proportion of their earnings if they are unable to work due to illness or accident.

It may be the case that you want to make the benefits of Group Income Protection insurance available to your employees but you cannot afford to fund it directly. In this case, you can choose to offer an employee funded version.

 

Initially, you establish a plan for your employees. The plan is structured and priced based on a Group Insurance model, where the cost and terms options are determined for the entire group of employees. Group insurance pricing typically takes into account factors related to the collective risk and characteristics of the entire employee group.

 

Whether an employee decides to take out a plan is up to them - they will fund it themselves and choose the benefit options that suit them. This means that each employee is in control of their cover level and they will receive the benefit directly, with no personal tax to pay (under current tax rules).

 

 

Your local income protection providers since 1887

 

At Wiltshire Friendly Society we have over 130 years of experience in providing the savings and protection needs of their members. We are a proud member of the Association of Financial Mutuals (AFM), meaning that we are owned by our members, and operate for their benefit.

 

Contact us today to discuss a Group Income Protection plan that suits the requirements of your business and employees.

 

 

Frequently Asked Questions

 

What is income protection?

Income protection insurance is an insurance policy that regularly provides the policyholder with a percentage of their income if they are unable to work due to illness or injury. This regular income will continue either until the policyholder retires or they are able to return to work. If you’d like to learn more about income protection, read our article.

What is Group Income Protection?

Group Income Protection insurance is a policy, taken out by the employer, that provides financial protection to employees in the event they are unable to work due to illness or injury.

Is income protection insurance the same as critical illness cover?

No, income protection insurance isn’t the same as critical illness insurance. Critical illness cover provides a single payment if the policyholder is diagnosed with a medical condition specified in their documentation. These conditions include serious illnesses such as cancer, heart attacks and strokes.

 

The aim of critical illness insurance is to offer financial support to the policyholder in order to help with medical expenses, living costs and any other payments that arise due to the illness (think hospital car park charges etc.)

 

Income protection is not a single payment. Instead, it is a regular payment that replaces a percentage of the policyholder’s income should they be unable to work due to their illness or injury. Learn more here.

Does Group Income Protection benefit employers in terms of recruitment and retention?

By providing a financial safety net for employees', Group Income Protection can enhance the attractiveness of the company as an employer, helping recruitment and contributing to employee loyalty and retention.

How long does Group Income Protection cover last for an employee?

The duration of coverage varies but is provided for a specified period, either an agreed period or until retirement, stopping sooner if the employee returns to work.