What is Income Protection?
Income Protection pays your employees up to 80% of their salary if they’re long-term ill or injured and can’t work, so you don’t have to.
It normally begins to pay out after your employee’s been off work for 6 months and continues to do so until either they return to work or retire. Thanks to savings you’ll make on Occupational Sick Pay and other indirect costs, it’s the only employee benefit that gives back up to 60% of the premium you pay in insured costs (cebr research, 2012). And if you’re worried about being tied to your employee, our Pay Direct option offers you a way of looking after them without having to keep them on your payroll.
Why does my business need it?
Long-term absence of more than 6 months is costing the UK private sector alone more than the Government’s annual rail budget (£3.1 billion)*. That’s a big bill!
For an employer with more than 500 staff, that’s an annual cost of £620,000. An Income Protection policy – which starts at roughly £17 per employee, per month – can help stabilise these unexpected costs. Policies also offer built-in (and free) services: rehabilitation, for helping get great talent back to work, and an Employee and Employer Assistance Programme (EAP), which includes legal help for your business.
*The Centre for Economics and Business Research (cebr) research carried out on behalf of Unum, 2012.
How do I get it?
If you’re thinking about introducing Income Protection as an employee benefit, it’s best to speak to your Financial Adviser or Employee Benefit Consultant.
They’ll talk you through the different types of Income Protection and make sure you get the right product and level of cover for your business and budget.
How can I afford it?
With policies starting from as little as £200 per employee, per year, Income Protection could be more affordable than you think.
Whether or not your total employee benefit budget is changing, reallocating your spend in a different way across all your benefits – and maybe including some new ones – could equal a better-balanced benefits investment. And, unlike other employee benefits, with Income Protection, for every £100 of premium paid, you’ll get back an average of £481 thanks to savings on Occupational Sick Pay and other indirect costs.
1. The Centre for Economics and Business Research (cebr) research carried out on behalf of Unum, 2012
2. Office for National Statistics (ONS), 2008
What’s the best way to tell my staff about it?
With 36% of staff saying their employee benefits package was the reason they stayed*, it’s important your staff know about it.
Yet 60% of employers talk to their employees about core financial benefits less than once a year or not at all (Source: Personnel Today on behalf of Unum, 2012). The best way to communicate your employee benefits package will depend on your type of business – take a look at the attachment for some ideas. Doing it successfully could help increase your employee engagement rates (and the associated productivity) by up to 25%**.
*Mercer: What’s working survey, 2012
**Unum research: "Employee Education and Enrolment Education series," January 2010. Results based on online survey by Harris Interactive
Knowing a bit about the different products available can help you have a more meaningful conversation with your Financial Adviser.
Although we can’t offer you advice on which of our products is best for you – you’ll need to speak to your Financial Adviser about that - we can give you information about them. There’s a lot of industry jargon out there, so we promise to explain our products - Income Protection, Life and Critical Illness - in a straightforward way.
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