What is Group Income Protection?
An important but often overlooked benefit is likely to be given a welcome boost and propelled into spotlight following the recent Improving Lives: Work, Health and Disability green paper, issued by the Department for Work and Pensions and Department of…
Blog13th Jan 2017
An important but often overlooked benefit is likely to be given a welcome boost and propelled into spotlight following the recent Improving Lives: Work, Health and Disability green paper, issued by the Department for Work and Pensions and Department of Health. Group Income Protection (GIP), which provides a financial benefit if an employee is unable to work because of long term illness or injury, is set to become a hot topic over the coming months.
In the paper, the government has asked the insurance industry to explain the role it can play in keeping disabled people and people with health conditions in employment and also what can be done to encourage employers include GIP as part of their benefits package.
Very early comments from within the insurance industry seem split on the best way forward, some want to see GIP incentivised with a cut in national insurance contributions whilst others feel the benefit requires stronger promotion. It is, however, encouraging that many are willing to comment and put forward what they see as the best solution. Clearly it is in the interests of the insurers for any initiative to be a success as they will see an increase in business which ultimately drives up profits.
Review your Benefit Arrangements
With auto enrolment introducing some form of employee benefit to many firms for the very first time, this is a great opportunity to review all benefit arrangements to see which products could form part of an overall package. It may be an additional cost to implement a GIP policy, however, there are many ways it can be structured to reduce that cost and when you consider the cost to any firm of recruiting temporary staff to cover for long term absenteeism, anything that can help get employees back to work quickly is likely to be welcomed.
Return on Investment
In many instances and with early intervention using the employee assistance programmes which forms part of a GIP policy, the absent employee may return to work before any benefit payment commences, demonstrating a real return on investment for the employer. With potential incentives, this could be a real growth area and one the government sees as providing some assistance while it aims to make further state benefit cuts. It may soon be a case of who can afford to be without this type of protection rather than it being seen as an additional company cost.