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Group Income Protection

Supporting employees above & beyond statutory sick pay

Provide employees with a monthly income
Speed up rehabilitation and recovery
Receive assistance with absence management
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Group Income Protection

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What is Group Income Protection?

Group Income Protection provides a monthly payment to employees when they become ill. But it provides far more than  financial support. The policy usually includes practical assistance designed to help employees recover and return to work faster, such as virtual GPs, consultants and mental health specialists.

The monthly payment is worked out as a percentage (usually up to 75%) of the employee’s salary. An employer can also choose to cover pension and National Insurance contributions. 

Group Income Protection is sometimes referred to as ‘Sick Pay Insurance’, ‘Employee Income Protection’ or even, ‘Business Long-Term Disability Cover’, but it all means the same thing.

Hooray Health & Protection is a friendly insurance broker which specialises in helping start-ups and small businesses negotiate the world of employee benefits. We offer one-to-one advice for FREE – and we promise that no question is too basic! 

Group Income Protection

Source: GRiD

Why do you need Group Income Protection?

Every UK employee has the right to statutory sick pay when they become ill. Right now, it amounts to £116.75 a week for up to 28 weeks (as of July 2024). But many employers choose to do more to protect the financial and physical health of their employees by investing in Income Protection. Not only does it provide extra financial support during the 28-week period, it can also last beyond that – helping employees when they need it most.

1. Shows you’re an employer who cares

The biggest reason that businesses invest in Group Income Protection policies is the support that it allows them to offer their employees. You can show your employees that you genuinely care about their financial wellbeing and that you don’t just see them as another clock-in, clock out automaton.

2. Gives employees a sense of financial security

Sick pay insurance allows your employees to have peace of mind that you are providing them and their families with financial protection when it is needed the most. Whether it’s a short-term or longer term absence, Income Protection can make a crucial difference to an individual or families financial wellbeing.

3. Makes you stand out as an employer of choice

Providing your employees with sick pay insurance cover is one way to ensure that you are leading the way when it comes to supporting staff with great benefits packages. In today’s climate, retaining the best people is an increasing challenge – the ‘Great Resignation’ phenomenon reflects how people have become less loyal to their employers as they seek a better work-life balance.

However, those companies who offer the most enticing benefits are best placed to ensure such a trend does not affect their workforce. Income Protection is a real practical benefit which cuts across different age groups and demographics – realistically, it can be needed by anyone at any time.

4. Gives you access to absence management specialists

With a Group Income Protection policy in place, you get access to rehabilitation and absence management specialists from day one, or as soon as you find out an employee is sick. The scope of services will vary depending on the policy, but they are all designed to ensure that employees get better sooner and, therefore, are able to make a speedier return to the workplace.

5. Provides business support

The insurance provider will help you take control of the situation, as well as mitigate any potentially catastrophic long-term damage caused by absences. Depending on which sick pay cover you choose, you can even source financial support to temporarily replace an employee.

Business Income Protection

How much does Group Income Protection Cost?

In order to ensure that you get the best possible policy, we assess each case individually. These assessments include:

  • Industry/Occupation
  • Claims history
  • Average employee age
  • Location
  • Combined salary to be covered
  • Pay out time limits (two years, five years, indefinite?)

Among other factors.

Of course, every company have its own budgetary constraints and so a scheme will have to be adapted accordingly. All this information will be used to select an appropriate level of business sick pay insurance cover. Comprehensive Group Income Protection, for example, usually costs more than limited-term plans, where you will pay your premium only for a set number of years.

All of the above will contribute to how much your group sick pay insurance costs and a quick consultation with a broker will give you a more precise idea. If your company already has a Group Life Insurance policy, you may also be able to get a discount by placing them both with one insurer.

Hooray Health & Protection’s team of experts can help negotiate these deals for you by leveraging contacts from across the insurance market. Simply use the chatbox on the right or call 01273 222805

Why choose Hooray Health and Protection for Sick Pay Insurance?

Hooray Health and Protection are a team of experts who truly understand the employee benefits industry. Our company is founded by passionate individuals, all of whom are dedicated to making sure that every single client or customer gets the very best results.

We recently worked with a company called Designer Group who were looking to review their benefits scheme and introduce Group Income Protection Insurance. The company already had various benefits and insurance schemes in place – but they were paying over the odds and dreaded having to make claims on behalf of employees.

To cut a long story short, we fixed all the problems they were facing and reduced the burden on their HR team, as Kerry Noblett, HR Director at Designer Group explained:

“We received a significant refund from our previous provider, due to us unknowingly overpaying for services. This was credit to Charlie and his team for persevering and managing this with the provider. Needless to say, I was definitely in the good books with our Finance Director, once I made him aware of the refund!”

It’s all too common for companies to be paying too much for their insurance while getting little in return – bar a headache. That’s why a broker like Hooray can help. It’s a complex industry and without expert support it’s easy to go wrong. Our experience working for some of the largest employee benefits insurers in the world means we can offer an insider’s view into how different policies work and how they calculate the price of Group Income Protection and other insurance schemes.

We also know how claims managers assess the validity of private sick pay insurance claims, so if you have a claim denied we will check if you have a strong case. If we think you do, we will take it up with the insurer.

If you would like to review your existing Group Income Protection Scheme or are considering applying for a new policy, don’t hesitate to contact us on the details below. 

Company Sick Pay Policy

Is Group Income Protection taxable?

From our experience in the industry and cases we have worked on, we generally see Group Income Protection benefit both employers and employees from a tax perspective. As they are paying for the benefit, employers will usually be entitled to get corporation tax relief on the premiums paid.

Employees can also benefit from the fact that the policy is not usually treated as a taxable P11D benefit in kind, so no additional tax is usually paid by employees. However, we specialise in employee benefits broking rather than tax! So, we always recommend liaising with your accountant or tax adviser for those queries – it’s a liability thing!

How to set-up an employee Sick Pay Insurance policy

Fortunately, it is easy to arrange employee Sick Pay Insurance. We will have an initial ‘fact-finding’ call to discuss your business, understand your requirements and establish which variations are most suitable for you and your employees.

Once that has been established, we will reach out to our insurance partners and negotiate the right price for your business’s unique risk profile.

From here, your consultant will then arrange a call and talk through the Sick Pay Insurance findings, to provide our recommendation for your business.

There will never be surprise costs for you, as we are paid a commission from our insurer partners for placing your business with them. 

Employee Sick Pay Insurance

Does Group Income Protection have any added value services? 

Yes, and they are very important! We always feel that added value services should be worth as much as, if not significantly more than, the insurance benefit itself. 

The two main added value services that 80% of group sick pay insurers offer (and, in our opinion, the two main services they should all be offering) are:

  • Employee Absence Reduction
  • Early Intervention/Rehabilitation

Most insurers will look to provide early intervention services within a Group Income Protection scheme. Many people we talk to are surprised by this, but think of it this way: it’s in everyone’s best interests. The shorter the absence: the less money the insurer has to pay out, the lower the absentee rates for your business and the healthier your employee.

Depending on your business needs, replacement staff costs can also be insured as an additional business benefit. 

As an insurance broker, we believe that early intervention is an incredibly important tool to help with absence management. Getting help on day one of notification of absence is paramount to preventing long-term, preventable absence issues.

What is an Employee Assistance Programme?

Employee Assistance Programmes (EAPs) are provided for no extra cost with most private Sick Pay Insurance schemes and are usually outsourced to professional workplace health and wellbeing providers. They are 24/7 confidential helplines for employees to discuss matters such as:

  • Mental health
  • Financial wellbeing
  • Legal issues
  • Medical problems
  • Workplace stress

Employee Assistance Programmes will also usually cover face-to-face sessions for up to an average of five sessions with a trained counsellor within 15 minutes of your home or work address. All employees of a company (not just those covered under the Group Income Protection Insurance) will have access to the benefit. They just need to complete an initial telephone assessment with a trained counsellor first.

These programmes are completely confidential for the employees who use them, and anything disclosed in the sessions will not be reported back to their employers. This is one of the reasons that insurers tend to outsource such services, as it helps the employee to build a trusting relationship with a wellbeing professional and avoid the daunting task of discussing traumatic issues with the insurance company assessing your claim.

start up group income protection

Can Group Income Protection be purchased by small businesses?

If you are a small business owner and your company has at least two employees (including yourself), we can help to provide Group Income Protection insurance. Typically, most of the insurers in the UK market will only provide cover to companies with at least ten employees, but at Hooray Health & Protection, we work with insurance providers that can provide cover for just two – and we still charge NO fee.

Group Income Cover


Frequently Asked Questions about Group Income Protection

Is Group Income Protection available for companies with two employees?

Yes! Most insurers have ten as their minimum number of employees, but we work with insurers who can provide cover for businesses with as few as two staff.

When does cover start if an employee goes off sick?

Each scheme has a deferred period which must be reached before the policy will start to pay. We ask employees/employers to notify us from the first day of absence, and insurers can provide early intervention services to help support staff back to work.

Which Company is the best for Employee Sick Pay Insurance?

Every company is different, so, before making a choice, we need to assess the company size, scheme design and risk requirements.

Will it cover any pre-existing medical conditions my employees have?

Pre-existing health conditions are usually covered under the policy if all employees are actively at work. Depending on how many employees are to be covered, some of the highest earners may be required to complete a health questionnaire.

Does Business Sick Pay Insurance cover Unemployment?

Sadly not. As the policies provided are in place to cover accident and sickness cover, we can’t add unemployment cover to the policy. Some schemes provide cover after redundancy for a set period, however.

If I Leave My Employer, Can I Continue My Group Income Protection?

Unfortunately, currently, none of the insurers in the UK market offer a continuation option when employees leave an ‘Employer Paid’ group income protection scheme. However, in order to combat this, Hooray Health & Protection also works in the individual Income Protection insurance market and we are happy to provide anyone with a free quote.

Help & Support

If you have any questions, please call us on 01273 222805 or email [email protected]

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