Paul Avis discusses the benefits and pitfalls for advisers considering the group protection sector.
Group risk insurers have supported their client organisations with online and telephonic legal support included in their packages – something that an employer may already pay for via retainer or through third parties.
Employers must ensure that they cater to the needs of all employees by making reasonable adjustments in the workplace for disabilities (whether physical or mental) and a GIP scheme, using an insurer’s vocational rehabilitation service, can support this.
At the same time, the removal of the default retirement age in October 2011 means it is not compulsory for employees to retire at the age of 65. These over-65s would find it difficult to obtain individual income protection cover, but cover under group protection can be made available to age 70.
As previously mentioned, employee absence can be very costly for a business, but employees who are absent for a prolonged period of time cannot just be dismissed. Any employer who attempts to let an employee go on the grounds of long-term sickness would find themselves in breach of legislation and risk a damaging tribunal.
Group benefits
GIP is designed to provide continued employee benefits for those who are off work due to long-term sickness. This means that the financial responsibility of continuing to provide for the employee is lifted from the employer, possibly allowing the retention of benefits under the employer’s private medical or death benefit schemes when they are needed most.
Group protection often includes added benefits such as the Employee Assistance Programmes (EAPs), which provide employees with the opportunity to speak to a counsellor about any stress they might be experiencing. Often such worries can be addressed before they become a reason for absence, thus reducing the costs to the employer.
Traditionally, employers provided EAP services to employees via a standalone product with costs routinely £5 to £25 per employee per annum. But with a GIP arrangement, the EAP is an inclusive benefit. In a recent survey of more than 4,200 employees who had received counselling, FirstAssist (one of the UK’s leading providers of EAPs) found 52% of employees stated that without assistance from their EAP, their issues would have resulted in them missing work. Powerful figures indeed – the importance of EAPs cannot be underestimated.
Such is our commitment to these services that Canada Life has extended cover to non-insured employees and launched a communication programme to encourage the use of them.
They can be used on a daily basis – this is important because although GIP claims may not happen frequently, employers are benefiting from the value of their GIP product on a regular basis.
