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The advantage of Group Income Protection for employees

Your employees are at the heart of your business. As a responsible employer, you care about them and want them to be at their best.

Group income protection is a fantastic way to make your employees feel secure. It is an employee benefit that will protect their finances should they be unable to work because of an illness or injury, providing a replacement income of up to 80% of their salary.

Here, Stacey Cole from Cowgills’ Wealth Management looks at why all employers should consider putting income protection in place for their employees.

Group income protection – an overview

As an employer, it is necessary to consider how you might support an employee who is off work for a long period of time. Supporting them when they need you most is not only the morally correct thing to do – it will also have a positive impact on the way they, their family and wider community view your business.

Income protection is paid after an employee has been off work for a defined period which is usually six months, as this is when they would no longer be entitled to Statutory Sick Pay.

The insurance continues to pay the income until the employee is well enough to return to work or they reach the end of the payment period.

Group income protection can also provide proactive rehabilitation, supporting your employees to return to work as soon as possible.

Attract and retain the best talent

Your business needs the right team to succeed so you want to attract the best talent to your business and keep them. Employee benefits, such as group income protection, are a great way for you to differentiate yourself from the competition to prospective employees.

Peace of mind for employees

Early intervention can be vital and providing additional help and support at the early stages of your employee’s absence can mean they get back to work quicker, resulting in less financial worries.

For those still absent after 28 weeks, statutory sick pay ends. Having an income protection plan in place gives employees the peace of mind knowing they will be financially supported while unable to work.

What cover will employees have?

Group income protection benefits can be tailored to suit your business’ and employee requirements. They can be paid until a set age or limited for a set period of time and start after an agreed deferred period.

Other benefits can be included, such as cover for an employer’s liability for NI contributions, long term supplementary benefit to cover continuing costs (such as pension contributions) or a final lump sum (e.g. to fund early retirement).

Group income protection can offer expert vocational rehabilitation to deliver the support your employee needs and cover can also include on demand access to UK registered GPs, health specialists, nutritionists and much more, allowing your insured employees to look after their health and wellbeing and be at their best.

What is the cost and are there any tax implications?

In buying the benefit for the whole of your business, the cost per person is cheaper than if they were to buy income protection themselves. This means you can provide your employees with a benefit they will really value, at a much lower cost.

Group income protection is a tax efficient benefit. The premiums you pay are not treated as a P11D benefit for your employees, so there is no tax charge for the employee and the premium payment is considered a business expense for corporation tax purposes.

In summary, group income protection provides long term financial security to your employees protecting them against the financial impact of being unable to work due to illness or injury. It’s simple and cost effective and can benefit both employees and employers – supporting employees to return to work when the time is right.

To find out more about the benefits of Group Life Insurance for both employers and for our help to get the best cover email enquiries@cowgills.co.uk


This is a financial promotion.

Wealth Management
Posted by Stacey Cole
11th May, 2021
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