Dual Benefit Group Income Protection
Product distributed through IFAs
Yes, with 20% level commission available.
Benefits based on gross salary
Standard scheme based on gross salary only.
Online literature provided
Yes
Limited payment term scheme
The insured must specify a limited income benefit period, with payments limited to two, three, four or five years. The benefit for any one event of illness or injury will be paid only for the period chosen. If a claimant is unable to work for a number of short periods because of an illness or injury, the combined duration of benefit payments cannot exceed the chosen period.
Stand-alone scheme
The scheme may be offered to members without other employee benefits.
Minimum age at entry
16 attained
Maximum age at entry
69 attained
Number of lives
The minimum number required under the scheme is three. The maximum is 99.
Maximum % of manual employees accepted
80%
Retirement ages
The maximum termination age is 70. The scheme retirement age can be any age between 55 and 70.
Deferred periods
Four, eight, 13, 26 and 41 week deferred periods are offered under the scheme.
Minimum scheme premium
The minimum scheme premium is £750 a year or £64.37 a month, which is inclusive of a 3% loading for premiums payable monthly by direct debit mandate.
Premium loading applied
Premiums are loaded where the premium payment frequency is other than annual:
- Monthly, 3.0%; quarterly, 2.5%; half-yearly, 1.5%.
Scheme benefits
No minimum monetary scheme benefit applies. It is expressed as a percentage of pre-incapacity earnings. The minimum benefit differs depending on the scheme.
Gross pay policy
Benefits are specified as a percentage of gross pre-incapacity earnings. The normal minimum basic insurable income benefit is 50% of pre-incapacity earnings, less the basic long-term rate of the State Incapacity Benefit payable to a single person and the maximum insurable benefit for each employee is 80% of pre-incapacity earnings including any employee pension fund contributions. The maximum basic insurable income benefit for any member is currently £300,000 a year, this includes any insured employee pension scheme contributions.
Business benefit
This is a mandatory supplementary benefit. The benefit is defined as 50% of pre-incapacity earnings to a maximum of £10,000 a month. Payment will start on the first regular benefit payment date after the claimant has been receiving basic income benefit for one full calendar month. Payment will be for a fixed maximum duration of six months. As a result the payment of business benefit depends on the duration of the basic income benefit payment and will not be paid on all claims.
Maximum benefit for each member (£)
£300,000 a year and includes any employee pension scheme contributions Unum agrees to insure.
Maximum insurable salary (%)
80%
Income during incapacity
The normal maximum income the insured can receive from all sources is 80% of pre-incapacity gross earnings. Examples of other sources of income which may affect the benefit payable include occupational sick pay, pensions and payments from other long-term insurance policies if these are payable for more than two years. If income from these sources takes the total income over the maximum permitted it will generally be offset against the income benefit payable under the policy. Untaxed income such as the benefits from individual IP policies will be increased by 50% to make it comparable to taxable income.
Maximum insurable employee pension contribution (%)
Up to 5%
Maximum insurable employer pension contribution (%)
The maximum amount of cover Unum will consider is one third of salary, up to a maximum benefit of £50,000 a year for each employee. This is an optional additional protection.
Maximum insurable employee National Insurance (NI) contribution (%)
Cannot be covered under this plan.
Maximum insurable employer NI contribution (%)
100%
Maximum insurable statutory sick pay (%)
100%
Benefit indexation during claim
Yes
Taxguard benefit
Not available
Relapse benefit available
If a member who has received income benefit returns to work and within 52 weeks again fulfils the definition of incapacity owing to the same or an associated cause, a new deferred period will not be imposed and payment of income benefit will commence immediately. This is known as a linked benefit claim.
Proportionate benefit available
When working on a part-time basis or in a reduced capacity, an income benefit will be payable in proportion to the reduction in the claimant's earnings, with an allowance for inflation. The business benefit will be adjusted in the same manner.
Rehabilitation benefit available
Yes
Best Doctor Service available
No
Helplines available
No
Claims support services
Unum offers a vocational rehabilitation service works with employers' and claimants' medical advisers to ensure appropriate claimants receive rehabilitation to help them return to work. Unum can also provide support and assistance to employers when considering their obligations to comply with the requirements of the Disability Discrimination Act.
Health and wellbeing services
No
Own occupation definition of disability applies
A number of definitions are available.
Any occupation definition of disability applies
No
Any suited occupation definition of disability applies
A number of definitions are available.
Overseas cover available
Yes, members are fully covered. Claims will be paid in sterling to the UK employer.
Minimum number of lives for unit rating
20 or more. If the number of lives insured under an existing policy falls below 20, Unum reserves the right to calculate the premium on the single premium basis outlined above from the following policy accounting date.
Minimum number of lives for single premium costing
Three. Plans which have between three and 19 lives would be single-premium costed. If the number of lives insured under an existing policy increases to 20 or more, Unum reserves the right to calculate the cost on the unit rated.
Premium guarantee periods
Two years for all policies. However, Unum reserve the right to amend these terms if it believes there is a significant change in the risk profile.
Premium review periods
Normally after two years.
Continuation option available
No
Waiver of premium available
Yes
Profit sharing available
No
Free cover during underwriting available
Where a member's benefit is subject to underwriting because it exceeds the free cover limit, a maximum period of two months temporary cover is provided in respect of the amount being underwritten.
Non-smoker rates available
No
Disability counsellors available
Yes, vocational rehabilitation consultants.
No worse terms offered
Yes when transferring schemes.
Free cover offered
Yes, the minimum number of lives acceptable for free cover is three.
Exclusions
Normal pregnancy. Unum provides full cover during maternity leave provided the member remains employed by her existing employer. A deferred period and all other policy terms and conditions will need to be satisfied before benefit is payable.
ANALYST'S COMMENT
Dual Benefit Group Income Protection aimed at small-to-medium sized enterprise (SMEs) employers was launched in April. In the event of a claim, the plan provides a benefit for the employee who is off sick and the employer. The monthly business income benefit is designed to help the employer manage long-term absence of employees. For example, the benefit may be used to hire temporary staff.
Unum carried out research with SME employers that identified anything over two weeks was regarded as long-term. This resulted in its inclusion of two short deferred periods - only offered by one other group income protection (IP) provider - of two and four weeks.
At the end of the payment period, the plan provides a serious illness lump sum benefit for the employee if diagnosed with one of a number of pre-defined critical illness conditions.
Unum has extended the services of its in-house team of vocational rehabilitation consultants to assist in the rehabilitation of incapacitated employees. This helps the employer to manage employee absences and helps Unum to manage claims and improve cost efficiency.
The group IP market is relatively small with around 10 providers and little product feature development. Unum, a protection specialist that focuses on group business, has listened to its customers and come up with a product that is honed to their needs.
- Ben Heffer, Principal consultant, life and protection, Defaqto
