Many employers will be aware that group income protection can be extremely effective in helping to manage long-term sickness and the associated costs.
Some employers, however, may not be aware of the value that insurers add beyond the pure payment of claims.
In some cases, employees are helped back to work before a claim becomes payable, often with the support of the insurer, the employer or both.
Group Risk Development (GRiD), the industry body for the group risk protection sector, has recorded the number of cases in which the insurer supported a return to work with some sort of active early intervention, such as fast-track access to counselling or physiotherapy, before the individual concerned was eligible for a monetary payment.
The data shows that 27% of those who received support through early intervention returned to work without triggering a claim. This compares to 25% in 2015 and just 20% in 2014.
In total, 2,289 people were able to go back to work during 2016 because of such intervention.
By offering workers access to such professional counselling, practical advice and support, including for issues such as debt management, relationship problems or health matters, insurers can often significantly reduce the length of sickness absence and the impact on an organisation.
Sadly, however, a return to work is not always possible. When a member of staff is off work for an extended period, group income protection can help to relieve money worries by paying out a proportion of the employee’s salary.
The benefit is paid to the business and then passed on to the employee through the Pay-As You-Earn system.
Currently, employers must provide statutory sick pay for up to 28 weeks to any employee off work sick.
Small and medium-sized enterprises are unlikely to provide financial support to an absent worker after the statutory sick pay period expires, although some will still want to continue paying out a portion of the employee’s salary.
Group income protection can help reduce the considerable financial costs the business would incur as a result of paying it unaided.
Group income protection paid out a total of £358.7million in 2016, an increase of £11.7million compared to 2015, while the average claim was £24,740 per year.
According to GRiD spokeswoman Katharine Moxham, these figures “give insight into the fantastic contribution of employer-sponsored group risk protection benefits in supporting people when they need it most.”
She added: “These policies pay out in dreadful circumstances for employees and their families. It’s excellent to be able to quantify the extent of the support we give as an industry through publishing these figures.
“It’s very affordable for employers to make a difference, but GRiD’s research regularly indicates that the cost of these benefits is overestimated or businesses don’t appreciate how much is included, which could also actually save them money elsewhere.”
GriD suggests savings could include not having to invest separately in a standalone employee assistance programme, or to pay for legal advice.
Employer-sponsored group risk financial protection cover is very good value. Basic level group life cover can be provided for around 0.5% of payroll.
A more comprehensive package, including group life and group income protection benefits, typically costs less than 2% of payroll.
“There are few other benefits that cost just a few pounds a month per employee but can pay out thousands of pounds – or even millions – and really make the difference between a family surviving financially or not.