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Group income protection vs personal income protection insurance

Insurance policies corporations buy on behalf of their employees are called group income protection. This coverage policy will protect employees’ income in the event of a total or partial disability caused by an accident or illness. It is designed to assist your employees financially if they can’t work due to health reasons. This can often be very beneficial when it comes to employee satisfaction and, of course, retention.  

An employer will pay an agreed-upon premium every month, and a claim will be filed in the event a worker is injured. Ill or and cannot work. The company or you will receive the payout, not the employee. Processing the payment through the company system and delivering the appropriate payment to the employee is the employers’ responsibility.

You can purchase group income protection for up to 80% of your employees’ gross salaries. A lot of insurers offer different amounts of cover, so speaking with an adviser like Aspect Underwriting is recommended to ensure you get the right amount of coverage. The employer can choose when to make or defer the payments and when to start and end the employee’s payment benefits. It comes in handy to have expert assistance for these types of decisions to ensure both the company and employees’ benefits are considered. 

Insurance companies are likely to offer additional services other than benefit payments to help the organisation cope with the loss of a valuable employee and help the employee recover so that they can return to work. The advantage to this is that it saves you money from having to replace the employee, but it also allows the employee to maintain their skills.

A general income protection insurance policy is paid for by the employer, but unlike a group income protection policy, which covers everybody, an income protection policy is specifically designed for employees who are willing to protect their income themselves.

Although employees can purchase individual income protection policies, without the power of a group purchase, their standalone policies will be much more expensive and provide fewer benefits. If you purchase a policy as a group, an insurer will charge you a greatly reduced premium per person for a policy of higher value. Many features of the policy can also be negotiated and included for very little or no additional charge.

A group income protection policy, is among the most highly regarded and requested employee benefits, believe it or not! This coverage is often negotiated with employers so that groups of employees can be covered, as it offers true protection for employees and their families.

So which one is better?

Group income protection is smart for everyone to be covered under one plan as it makes it more manageable for the employer. It usually requires three employees to be covered for it to satisfy a ‘group policy’. As a result, the cost of moving larger groups is lower. Usually, this type of insurance is part of a comprehensive employee benefits package, which may also include health insurance and life insurance.

General income protection insurance can be a better type of policy if an employee is opting for the scheme on their own; therefore, they can be more flexible regarding their personal plans.

Contact Aspect Underwriting if you are considering either of these types of policies. The income protection insurance we offer covers a wide range of income protection needs despite the fact we do not cover a specific group income protection plan.

 

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