Feefo Platinum Trusted Service Award 2024
Free £100 Gift Card Offer
Our logo

PROTECTION PROMISE - 100% Conditions Covered

Our Insurance Partners

Sign up for our newsletter

Stay in the loop about all the latest news, exclusive offers, and fantastic discounts. We promise it's spam-free!

When you run a business, you may have income protection insurance in place to protect your finances in the event you cannot work due to illness or injury.

As an employer you may want to offer this type of benefit to your staff as well, allowing them time to fully recover so they are at their best before rushing back to work. This can help as early intervention to avoid recurring illnesses and longer term absence.

Income protection can be especially useful if you are limited when it comes to budgeting for a work sick pay scheme – plus there are added tax benefits to this type of insurance!

Group income protection can also make your workplace seem more appealing when recruiting, as an attractive additional benefit you offer employees.

Five Stars

Rated "Excellent" 5 out of 5

"This company went above & beyond to get me cover even though I have MS, I am very happy I managed to get cover, Amazing staff, Dean went above & beyond, I highly rate this company."

by Elizabeth Turner-Long - 9th August 2023

Group income protection is a policy offered by providers that will cover an entire group of people as opposed to a single policy.

This can be a great additional employee benefit you can provide as extra financial support to your employees if they become ill or injured to the point they cannot work. It can also be used to help you cover the costs of hiring someone temporarily to cover this staff member’s work.

With some providers, you may even have access to wellbeing services and additional support services to help support your employee’s return to work. This can include physiotherapy/rehabilitation or counselling if the employee is struggling with their mental health.

CAN YOU GET GROUP INCOME PROTECTION INSURANCE?

YES – if you wish to offer income protection as an added benefit for your employees there are specialised policies designed for exactly this purpose.

It is important to consider how much you are willing to pay for this policy long term and the level of cover you wish to provide. You can cover employees for a set period of time or right up until the date they return to work.

WHAT IS COVERED IN A GROUP INCOME PROTECTION SCHEME?

YES – although there are many income protection policies aimed at individuals, there are some great policies available that have been designed to cover groups.

There are various group income protection schemes on the market so exactly what is covered can vary.

A standard group income protection scheme will cover a percentage of an employee’s salary while they are unable to work, but there can also be advantages for employers including:

  • Covering the employee’s National Insurance contributions
  • Paying toward employee’s pension contributions
  • Helps toward the cost of hiring any temporary staff to replace the employee
  • Pays out a lump sum if the employee needs to retire early due to being unfit to work
  • Some providers offer rehabilitation services, helping employees return to work faster and stay there

Group income protection works similarly to any other income protection policy. The policy holder (employer) pays a set premium every month to ensure the cover is in place.

The pay out from the policy will usually cover between 50%-70% of the employee’s salary for either a set time period or until they can return to work.

With certain providers, you can have the option to cap the amount paid out so it is worth checking policy specifics with each provider if you would like to do this.

The pay out from the claim will be paid out tax free to the employer, who will then pay this to the employee in the same method as their usual monthly salary (PAYE).

The employee can then use this to cover monthly expenses they may otherwise struggle with such as mortgage payments or rent. This will be paid every month rather than one lump sum payment like with CRITICAL ILLNESS COVER.

The policy pay out can usually also be used to fund extra things such as the employees National Insurance and Pension contributions and cover additional costs related to their absence.

Although you can offer group income protection as an attractive incentive to new hires or current employees, it isn’t classed as a ‘benefit in kind’.

A benefit in kind usually refers to any perks an employer offers that is not their salary, including insurance policies such as income protection or critical illness cover. Some of these are taxable and need to be declared using a P11D tax form.

COMPARE GROUP INCOME PROTECTION

If looking for the best deal for your employees, it is worth speaking to an income protection specialist.

HOW MUCH IS GROUP INCOME PROTECTION INSURANCE?

How much you will pay for your premiums will depend on the level of cover you wish to offer your employees. You can keep policy costs low by choosing a longer deferred period.

This refers to the amount of time between the employee starting sick leave and receiving payments, which can be deferred by up to 12 months or more.

While this can drastically reduce costs per month, you will need to cover sick pay between the employee being off and the claim payments starting. This will usually be via statutory sick pay (SSP) but can be further topped up through your own means if you wish.

As an employer, you can take out various types of insurance to protect yourself through your business and protect employees key to the everyday running of the business.

Group income protection is a way of offering your employees extra financial security, while benefitting from the tax efficiency of this scheme and saving on sick pay costs.

It can also be an appealing perk to offer your employees to encourage employee retention or to attract new people to the business.

Learn more about BUSINESS LIFE INSURANCE POLICIES.

COMMON QUESTIONS ABOUT GROUP INCOME PROTECTION

Below are the answers to some common questions business owners have about group income protection:

How long does group income protection cover last?

Group income protection will cover the employee until they leave the company or in some cases reach an age limit specified when the policy is taken out e.g. retirement age.

How long will group income protection pay out for?

This will depend on the terms of the specific policy. In most cases, income protection will pay out for a maximum of 12 or 24 months following the deferred period but some will pay out for longer or indefinitely. The pay outs stop when the employee can return to work, reaches the end of their claim limit or leaves the business/retires.

Can a smaller business take out group income protection?

Although group income protection is most often used by larger businesses, small businesses can still take advantage of the benefits of this insurance. Some lenders may have requirements such as a minimum number of employees though. It is worth consulting an expert who can find the right provider for your business size.

If you need help finding the right group income protection for your business, speak to one of our insurance experts. We have years of expertise when it comes to income protection and know exactly which lenders work best when it comes to group schemes.

We can offer FREE and FRIENDLY advice on what schemes will work best for your employees – without breaking the bank.

USEFUL RESOURCES

Gov.uk – Get help with tax

Gov.uk – Contract types and employer responsibilities

Health and Safety Executive (Gov.uk) – Managing sick leave and return to work

Gov.uk – Statutory Sick Pay (SSP): employer guide

Department for Work & Pensions – Sickness absence and health in the workplace

Sign up for our newsletter

Stay in the loop about all the latest news, exclusive offers, and fantastic discounts. We promise it's spam-free!

Open chat
How can we help?
Scan the code
Welcome to iam|INSURED 👋

Please feel free to connect with us on WhatsApp so we can help you and answer your questions.

Click “Open Chat” to start.