Focussing on Canada Life, Chase Templeton assesses the benefits of Group Income Protection, a product designed to provide a regular monthly income to employees should they be unable to work due to illness or injury.
Group Income Protection
Canada Life, the UK’s largest provider of group insurance.
Group Income Protection is designed to provide a regular monthly income to employees should they be unable to work due to illness or injury. Generally this is in relation to medium or long term illnesses as the employer’s internal sick pay policy would normally cover any short term sickness periods.
The continued monthly income is paid at a reduced salary amount (as chosen by the employer) and is usually between 50% and 75% of the employee’s salary.
Its secondary purpose is to provide employers with professional support in dealing with employee absence. This includes advice lines for employers, rehabilitation services for employees and the opportunity to reduce the overall cost associated with having absent staff.
Any employer with an interest in supporting their staff and also managing their company sickness costs.
Businesses employing from as little as two staff, including partnerships, can protect some or all of their staff using the Canada Life group income protection policies.
The main benefit is a continued income for staff who are absent due to sickness. This enables them to keep up with their essential outgoings (mortgage, utility bills etc) during their illness.
Canada Life’s group income protection policy offers access to their Early Intervention Service, an absence management resource which employers can use for advice when an insured employee is absent. They are also backed by the EmployeeCare Employee Assistance Programme and BusinessCare service which helps employers comply with employment law and advises on safety and HR issues.
Depending on the employer’s preference the continued income can be paid for an unlimited duration while the employee remains ill, right through to their State Pension Age. Alternatively, the employer may choose to offer a reduced payment period (for example a maximum of three years). This approach still offers a valuable sick pay benefit but keeps premiums low.
Employers can choose to insure the employee’s National Insurance and Pension Scheme Contributions through the policy if required. Canada Life would then pay these elements in addition to the continued income during sickness.
Canada Life offer “free cover limits” which minimise the need for employees to provide any medical evidence to be covered. All employees would be covered up to the free cover limit (for example a benefit of £65,000 per annum) and any employees with benefits higher than the free cover limit would complete Canada Life’s medical form for the portion of their benefit above the free cover limit. This approach greatly minimises the medical information needed to set up these policies.