Group Income Protection – sometimes referred to as permanent health insurance (PHI), income replacement, or long term disability – provides a monthly replacement income, if an employee covered by a policy is unable to work, due to long – term illness or injury.
The cover pays employers a proportion of an ill or injured employee’s earnings at the end of a pre-selected period of time (called a deferred period), the length of which can be chosen to dovetail with the end of the company’s short term sick pay provision. The employer passes the payment onto the employee through payroll and tax is deducted as normal.
Benefit payments usually continue until the claimant is well enough to return to work. Some employers choose to limit the benefit payment period to; for example 2, 3 or 5 years, whereas some choose for it to last until normal retirement date.
Employers want to retain the investment they have made in recruiting and training skilled staff and the leading insurers offer proactive rehabilitation and return to work programmes, that aim to help employees back to work if at all possible.
Benefits for your company:
- Provide financial assistance at a reasonable cost
- Foster good employer – employee relations
- Enjoy tax relief on contributions
- Arrange cover for company pension scheme contributions and employer’s NI contributions
- Advice on absenteeism strategies
- Receive expert support in managing long term absence and rehabilitation.
Benefits for your employees
- Financial reassurance when its really needed
- Help and support during rehabilitation
- No benefit-in-kind tax penalties
- Additional cover for pension contributions
- Continued disability cover without further medical evidence.