What is Group Critical Illness cover?
Group Critical Illness provides a financial safety net for your employees if they are diagnosed with a serious illness.
The last thing that your staff and their family should be worrying about is their finances, when they should be focusing on their recovery.
Group Critical Illness allows employees to have peace of mind, that should the worst occur, they receive a tax-free lump sum.
Why do I need Group Critical Illness Cover?
Sadly, a lot of the companies that we talk to about Group Critical Illness are reviewing their arrangements as they have been impacted by a serious illness in the workplace and want to provide support for employees going forward as they now understand the devastating effect it has on their life, as well as their business’ productivity and overall performance.
It’s so easy to fall into the trap of thinking that ‘it won’t happen to me’ or ‘it won’t happen to my staff’ but if we look at the sobering fact from research taken by Cancer Research UK in 2014-2016 there were around 363,000 new cancer cases in the UK every year, which is more than 990 every day.
By taking out Business Critical Illness Cover, it means that you are offering protection and support to your employees for the events that we don’t want to think about, but could happen.
If we consider the potential impacts of a critical illness:
- Reduced salary if unable to work
- Changes to home to accommodate
- Medical bills for private care
- Additional expenses when dealing with the impact of diagnosis
Employers do still receive benefits from providing cover, as in turn, employees are likely to feel loyal to your company, wanting to work not only hard for you whilst they are there, but also work for you in the long-term too.
As well as building trust with your current employees, company critical illness cover can also help you to stand out amongst the crowd for new outstanding recruits.
The majority of group critical new business is offered to employees on a voluntary basis for staff to pay their individual premiums, however taking this cost on yourself will make you stand out as an employer who cares about their staff.
We can help advise you on either situation, and which would work best for your business.
How much will Group Critical Illness cost?
As we mentioned in our business-critical illness frequently asked questions, it is still a growing market so unfortunately there is not enough data for the insurers to provide a rough estimate for employers considering the product.
Insurers will consider several factors when deciding the premium based on your company’s workforce.
Underwriters will assess the risk by calculating the average age of the employees on your pay role, identify which members are high risk due to older age and consider the risk they pose in relation to their level of cover.
Group Critical Illness can hugely vary in cost depending on the level of cover you choose with the optional enhanced cover (cancer drug funds etc.) costing considerably more.
As we mentioned that the the market is relatively new in comparison to other group risk products, we suggest arranging a call with one of the Hooray Health & Protection experts who can discuss your budget requirements and then tailor the quote specifically to your needs.
We have helped several companies to arrange cover who previously thought they couldn’t afford it as previous brokers didn’t review adding in length of service requirements etc. It is worth talking with a team of experts who have experience of insurers underwriting requirements to establish what plan suits your budget.
Is Group Critical Illness taxable?
Group Critical Illness isn’t as straight forward as the rest of the group risk market when it comes to take, hence why most advisers tend to shy away from talking about it.
If the policy is taken out by the company to cover their staff, then tax relief is given on the premiums, but the employer will be liable for national insurance contributions on the premiums.
Don’t forget the premiums are treated as a P11D benefit for employees.
However, we are seeing more and more these days most business-critical illness schemes being offered voluntary on a flex scheme basis, which means as the employee is paying themselves the premium can not be claimed as a business expense.
In the event of a claim the premiums paid directly to the employee will be a tax-free lump sum for them to spend how they see fit.
At Hooray we are employee benefit experts, not accountants. We can navigate you through the basics but would always advise reviewing any tax matters with your accountant or a tax specialist.
Does Group Critical Illness have added value services?
Obviously, parents will not want to think about what would happen if their child was diagnosed with a critical illness, but we have a duty of care to ensure employers consider this when arranging their staff benefit plans.
Most Group Critical Illness insurers will automatically provide cover for your staff’s children for no extra cost and we ensure we include this in every business critical illness review.
Child cover on staff critical illness policies will usually be to a maximum of £20,000 benefit and covers up to eight critical illnesses.
Understandably, your employees may want to increase this benefit and we can offer to review this for them at no additional cost to your company.
Employee Assistance Programmes which provide face to face or telephonic counselling for employees experiencing emotional stress (whether covered by the insurance policy or not) will normally be included in the price of the company’s critical illness policy.
Employees will have access to a set number of face to face counselling sessions (usually six) which will be confidential for the employee yet provides employers the peace of mind their staff have access to help when required.
Will Insurers pay my claim?
One of the most common questions we are asked by people querying new critical illness insurance is ‘will my claim be paid with no problems?’.
Below we have an insight into the claims percentage for the critical illness market (group and individual) in 2018 showing insurers in general have a 92.2% pay out rate:
Due to group critical illness being a relatively new product we haven’t been able to find the information of the claim splits between individual and group.
We are happy to see the claim percentage at 92.2% and insurers can have valid reasons for declines (non disclosure of vital information, not meeting terms and conditions, fraudulent claims etc.) but we will continue to lobby to see this increase.
Why choose Hooray Health and Protection for Group Critical Illness Cover?
Group Critical Illness can be tricky to know exactly what type of cover and protections are right for your business because of the lack of information available due to it being such a small market.
At Hooray Health and Protection, we have an extensive background in arranging new policies and managing claims, so know which will insurers provide the right solutions for your employees’ needs.
We won’t charge you anything for a review, whether it’s a new or existing policy, so why not give us a call to discuss today.