What happens to my family and me, if I can't work?

It's a very worrying thought, but accidental injuries and long-term illness do happen. Without any warning, an employee can lose the ability to work and to earn money. An employer can help for a while, but few companies can afford to pay people for long when they can't work. That's where Group Income Protection comes in. 

How does Group Income Protection work?

Group Income Protection is an insurance product, paid for by the employer. When an employee is off work for a long time because they are ill or injured, the insurance company pays part of their salary to the employer. The employer then pays the employee, normally at the reduced rate. The payment is made through payroll, collecting tax and National Insurance at the appropriate rates.

How long do payments continue?

This is one of the decisions the employer needs to make when setting up a scheme. This will affect the premium the employer needs to pay. In all cases, the cover will end when the employee recovers and is able to return to work. In most cases, cover would also end if the employee becomes able to do a different job.   Some illnesses and injuries are so serious that the employee will never be able to work again. More generous schemes will continue to pay until the employee reaches State Pension Age. Other schemes may define a shorter period. A five year period is not uncommon.

When does Group Income Protection start to pay?

This is another key decision for the employer and it will affect the cost of the insurance. When applying for Group Income Protection, the employer will be asked to specify how soon payments will start.   Employers are obliged to pay employees for a time when they are off work due to illness or injury. Contracts of employment normally set out a fixed period that will be paid at normal rates. After that the employer is obliged to pay Statutory Sick Pay ("SSP") for up to 28 weeks. SSP, currently set at £88.45 a week, is typically much less that the employee's normal earnings. Find out more about SSP on the UK government website: GOV.UK. Employers can feel morally obliged to help with this gap. A shorter gap will reduce the cost to the employer at the time, but it will increase the premium for the insurance.

Insurers offer deferred periods ranging from 13 weeks up to 1 year. When making this decision, it is worth considering for how long you, as the employer, will be happy to pay an employee on long-term sick leave. It could be financially disastrous for an employee to slip into a gap between your payroll and the insurance support where they receive only SSP.

What's my next step?

If your company is fully set up on bob, we have all the data we need.The benefits team at bob will be delighted to help by getting quotes for you. There's no commitment Get started by going to the Benefits Store and selecting Income Protection.If you have questions, you can use the chat facility in bob or email benefits@hibob.com. If you'd like us to call back, please leave a number we can call.

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