Looking after staff and families, main reason SMEs offer Group Income Protection

An obligation to look after staff and families is the main reason SMEs offer group income protection (GIP) to their employees, shows research from industry body GRiD, which represents the group risk protection sector (employer-sponsored life assurance, income protection and critical illness cover). This is closely followed by using the benefit to help differentiate them when looking to recruit and retain.

Key reasons for SMEs offering Group Income Protection (GIP) include:
 31 per cent offer GIP to help them meet their obligation to look after their staff and families
 25 per cent use GIP to help them differentiate their package to support recruitment and retention
 22 per cent of employers understand that GIP can be a tax-efficient benefit for them
 19 per cent use the benefit to help manage long-term absence
 And 23 per cent believe they recoup the cost of the benefit in improved productivity and staff morale

Another key reason SMEs gave for offering GIP to their workforce is that they believe Statutory Sick Pay is insufficient to actually support people unable to work (29%). With the onus of responsibility for looking after the welfare of staff increasingly falling on the shoulders of employers, group income protection is being widely recognised as a central tool to help. Even to the extent of being debated last month in parliament, group income protection was put forward as being key in helping employers support their staff and help get them back to work. This is particularly so in supporting those in mental ill health – the biggest cause of claim on the insurance.

Katharine Moxham, spokesperson for GRiD said:

“Group income protection is the jewel in the crown of employee benefits, from offering financial support for employees unable to work through sickness or injury through to access to specialists to support them emotionally. Employers too have access to specialist advice, case management and mediation, which can be particularly useful to SMEs. When employers utilise the benefit to the full they get great value.

“We’re pleased to see that many SMEs are making the most of the benefit, but we’d like to see better utilisation. This is a benefit that’s designed to be regularly accessed by all – not simply left on the shelf for an emergency.”

Support for employers

In addition to the financial pay-outs for staff that are widely recognised, GIP can also provide employers with a level of business care to assist in managing employees from day one of absence, early intervention programmes, help with identifying patterns in absence, management training, and advice for HR, line managers and business owners. GIP has been traditionally seen as a benefit for employees, however, doing the right thing by offering financial support and vocational rehabilitation to staff means that employers benefit too: employees often make a quicker recovery and return to work – improving business productivity and keeping absence and recruitment costs down.

Support for employees

Aside from the core financial benefits for staff, the added-value benefits for employees are numerous and range from prevention measures in the form of access to health apps and advice; support during a diagnosis such as access to a second medical opinion; as well as vocational rehabilitation services and support after an illness or injury which can include mental health counselling and specialist oncology support. In addition, Employee Assistance Programmes are generally made available alongside a GIP scheme and these can be accessed every day whether or not a claim has been made. This can provide employees with advice for everyday issues like childcare, eldercare and financial problems, as well as support for issues such as stress, anxiety and bereavement.

Additional benefits for SMEs

SMEs can often be family-run businesses who feel they have a moral sense of duty to look after their staff financially when they’re unable to work, even funding support themselves. GIP can be a much more cost-effective way for SMEs to provide such support, whilst also being seen to deliver on their duty of care towards staff with the wider benefits that come along with a GIP policy. Without protection insurance this can be an expensive burden.

Katharine Moxham continued:

“The product name ‘Group Income Protection’ probably disguises the increasingly comprehensive list of additional help and support services included and also, because employers often think GIP’s more expensive than it is (74% of employers overestimated the cost of providing GIP to all their staff*) it may not be given the attention it deserves..

“For between 0.25% and 1% of salary roll, GIP packs a powerful punch but it works best when employers work with advisers and providers to extract all of the treasures that lie within.”