Can You Get Group Income Protection Insurance?

Are you worried about how you’ll cope financially if illness or injury stops you working?

In 2024 alone, insurers paid £546 million in group income protection insurance to support almost 16,000 UK employees. The financial sector is the largest sector affected by absenteeism in terms of employment.

At Insurance Hero, we will explain what group income protection insurance is and how it helps employers provide financial security and mental health support for their staff. Keep reading to see why this cover could make a real difference to your business.

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What is Group Income Protection Insurance?

Group Income Protection Insurance is a policy employers buy to support workers who become ill or are injured. If employees are unable to work due to sickness or injury, the policy pays a portion of their salary each month.

This provides financial security during tough times and helps companies manage employee absences due to illness.

It covers long-term health conditions; these might include multiple sclerosis, musculoskeletal disorders, or mental health problems like anxiety and depression.

Employers may offer this benefit alongside pensions, life insurance, private medical insurance, occupational therapy services, and an employee assistance programme to boost workplace wellbeing.

Group income protection supports staff through illness by covering salaries and aiding recovery.

Coverage extends beyond simple sick pay outlined in an employment contract; it also provides access to vocational rehabilitation specialists, such as physiotherapists and psychiatric nurses.

Insurers typically tailor payment terms based on salary percentage amounts (usually around 50%–80%) with flexible waiting periods before payments begin.

Policies often run until retirement or state pension age, but can feature customisable termination dates depending on business needs, making them helpful for absence management strategies too.

Choosing the right coverage involves understanding how group income protection works in your company’s circumstances, compared with group health insurance plans.

Features of Group Income Protection

Flexible plans enable you to match coverage to staff needs, helping to manage costs and reduce staff turnover. Additionally, early support from medical professionals helps employees stay healthy and recover quickly after illness.

Flexible payment terms

You can set payment terms to suit your business. Choose from short- or long-term options that match your staff turnover and employee benefit goals.

• Cover is flexible, with payments available for up to 80% of an employee’s salary, and various waiting periods.
• There’s also a Limited Payment Term option, which allows businesses to offer benefits over defined periods of 2 to 5 years, culminating in a lump sum payout of up to £1.6 million.

This approach helps protect workers facing health issues, such as illness or injury, without leaving them uninsured during tough times, and supports their coping while they are off work.

Customisable waiting and termination periods

Group income protection insurance lets employers choose waiting periods from 13 weeks. Employees wait for this set time after a long-term illness or injury before getting payments.

Short waiting times mean higher premiums; longer waits reduce the cost. Employers also have choices about termination periods, deciding how long benefits last.

They can choose traditional plans lasting until State Pension Age, typically around 65–70 years old, or shorter terms of one to five years.

Customised features like these offer clear advantages over general pension plans and life annuities.

Unlike standard defined benefit schemes or health group covers that are fixed for everyone, adapting cover to staff needs improves workplace wellbeing and offers better early intervention support too.

Access to additional support services

In addition to flexible waiting and termination periods, employees receive extra support through additional services.

• Employees have immediate access to health specialists if they struggle with illness or have been absent from work for a while.
• These rehabilitation and wellbeing support services are usually free, although certain types may incur additional charges.
• They also include personal well-being checks to boost employee engagement, productivity, and workplace health and fitness.

With such direct expert support, workers facing challenges such as neurodiversity issues or complex conditions identified by oligoclonal bands can recover sooner; this personalised care goes beyond basic income protection or group health insurance alone.

Compare The UK’s Top 10 Insurers For Group Protection.

Benefits of Group Income Protection Insurance

Group Income Protection provides staff with peace of mind and financial support, easing stress during illness, and offers additional services to help them return to work.

Financial security for employees

Employees who face long-term illnesses or injuries often worry about paying their bills. With group income protection insurance, staff can receive regular tax-free payments of between 50% and 70% of their salaries.

These benefits may last until the employee returns to work, reaches retirement age, or for a fixed period specified in the policy terms.

It is vital to grasp these details clearly; understanding coverage limits and waiting periods greatly improves an employee’s financial security.

Unlike life insurance policies that pay out lump sums after medical underwriting approvals, this type helps maintain a steady income flow during tough times.

By alleviating financial concerns associated with illness or injury, workplace well-being naturally improves as well.

Improved workplace wellbeing

Group Income Protection Insurance helps boost workplace wellbeing and staff happiness. Over half of workers in the UK have faced mental health problems, with around 20% still working despite feeling mentally unwell.

Early Intervention Services (EIS), offered through Group Income Protection, step in quickly to support staff during long-term absences, such as serious illness or injury, and assist them promptly back into work.

This helps not only give financial security but also reassures staff that their employer values their welfare more than just financial perks or investment managers looking after company funds.

By showing this care, morale stays high, naturally leading to better productivity at work.

In addition to improved well-being, Group Income Protection also actively supports employee rehabilitation and return to work.

Support for employee rehabilitation and return to work

Better well-being at work goes hand in hand with strong support for staff rehabilitation. In 2021 alone, insurers helped 4,395 UK employees get back to their jobs before making a claim.

• Mental health issues made up 54% of these cases, and muscle or joint conditions accounted for another 10%. A dedicated case manager offers clear guidance and emotional care throughout the claims process.
• Wellbeing services, such as mental health advice and Employee Assistance Programmes, provide practical tools to cope better in everyday life.

This extra layer of care makes group income protection clearly stand apart from standard options like income protection vs. group health insurance or life annuity plans.

How to Choose the Right Policy

Check what your company and employees need. Compare different plans carefully. Online comparison tools and professional insurance advisers such as Insurance Hero can help you find a plan that’s right for your team.

Assess your business needs

Assess your staff’s financial support needs in the event of a long-term illness or injury. Consider their age: older workers may require more extended coverage and higher benefits, while younger employees might benefit from flexible terms and lower premiums.

Review factors like how many of your team are eligible for Group Income Protection (GIP), their pension scheme status, and the overall cost to your company.

Indexation can help payments keep pace with living costs, so factor this into any policy decision.

Confirm that the current structure of your company allows all intended staff to qualify for cover under a GIP plan.

Compare providers and features

Choosing the right Group Income Protection Insurance policy means carefully reviewing key features, coverage options, and premiums from various UK providers.

Gather quotes from multiple UK providers. Compare details of benefits, conditions and premiums to find the best protection and value for money.

Group Income Protection tends to cost less per person compared to Individual Income Protection.

Our Final thoughts

Group Income Protection Insurance gives UK employees a clear financial safety net during tough times. It offers payments to staff who are off work due to long-term sickness, as well as specialist advice, health support, and rehabilitation support to help with a speedy return.

Employers also benefit, with tools like HELP@HAND providing their teams with easy access to remote GP visits and mental health support at no additional cost.

With thoughtful planning and careful research into policy providers, a policy can deliver lasting peace of mind for your whole workplace.

Related reading:

• Affordable Income Protection Insurance
• Income protection cover for NHS dentists
• Veterinarian income protection
• Best ways for self-employed people to safeguard their income
• Protecting Your Income Tips for Doctors
• Contractors serious illness cover

External references and resources:

• https://connect.avivab2b.co.uk/adviser/protection/group-protection/group-income-protection
• http://www.canadalife.co.uk/workplace-protection/group-income-protection/