Group Income Protection Plans

Group Income Protection Plans are designed to allow an employer to continue to provide an income to staff if they are unable to work due to prolonged illness or disability. Standard schemes pay benefits until the employee recovers, dies or reaches the previously agreed ceasing age of the policy, which is often selected to coincide with normal retirement age. Limited-term schemes pay for a maximum of two to five years, or sometimes up to 10 years.

Benefit begins after a deferred period and can pay up to 75% of gross income. Where an employer wholly sponsors a scheme, then under current legislation, premiums for the scheme will normally qualify for relief of corporation tax. Premiums paid on behalf of the employee are not treated as a benefit in kind and will not attract extra National Insurance contributions from either employer or employee. Schemes are not subject to insurance premium tax (IPT) and, if offered to the majority of employees, is normally an allowable business expense. A minimum of five employees are generally required to form a group.

Most insurers offer proactive claims management to ensure employees return to work as soon as possible which ultimately helps to control costs for the employer. The market is developing with Unum becoming the leading provider of group income protection cover in the UK.

The reasons for choosing GIPP are similar to those for PMI in that IPP helps to attract and retain quality staff, along with showing that the employer cares about staff and providing peace of mind at times of great stress.

Schemes need to be tailored to the specific requirements of each business and we will be happy to assess your needs and to advise you upon the most suitable type of arrangement for your business.

Contact your independent adviser, Healthcare Partners, for a free quotation without obligation.