Group Income Protection Pros and Cons

Paying staff during prolonged periods of sick leave due to an accident or ill health can leave a significant hole in your business’ bottom line. For most companies, group income protection insurance offers a valuable safety net to protect the company from any financial impact of long-term absence of leave. But you may be wondering what the pros and cons are and whether it’s the right option for your business.

In this article, we’ll cover…

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What are the benefits of getting group income protection?

Group income protection (GIP) helps your business effectively manage the impact of staff illness by paying a monthly income to employees on prolonged sick leave. It often comes as a comprehensive service that offers not only financial support, but also services that can help your people get back on their feet faster. In some cases this includes counselling, physiotherapy, or other collaborative support.

The fact that employers are, in most cases, able to get corporation tax relief on money spent paying for premiums makes it an attractive and worthwhile safety net.

Businesses using GIP see multiple benefits including:

  • Reduced financial impact from long term staff leave
  • Employers can offer better benefits packages to attract employees
  • Improved processes for handling staff absence as the business benefits from insurance management
  • More predictable cashflow management

Advantages of group income protection for employees

GIP can provide employees with a lifeline of support during the most difficult periods in their lives. They will benefit from the peace of mind that they will be well taken care of financially, without their long-term absence draining company resources.

Many GIP policies also include additional health and mental wellbeing support services, so your team can benefit from the best possible care and support.

Common benefits for employees include:

  • Holistic health support
  • Employee assistance programmes as an add-on service that can reduce length of staff absence and minimise the business impact of having key staff away from team.
  • Financial protection for the duration of their illness

Is group income protection worth it?

With multiple key benefits to staff and business, you may be wondering whether there are any disadvantages to getting GIP or if there are other ways to shoulder the cost of staff illness absence.

It’s important to examine what safety nets your business already has in place, so you can accurately determine the extent to which getting GIP will benefit your company. Some factors to take into consideration include other forms of insurance you or your staff may have which could help to add a financial safety buffer to long-term staff illness.

Does your company already have enough of a financial buffer to manage without it? Do you already have employee wellbeing programmes in place? Or would your company benefit from getting add-on employee support services to help your staff better cope with an illness or unexpected crisis?

A financial advisor can help you accurately assess your situation and determine how much GIP cover your company might need.


Speak to an expert advisor today!

If you’re looking into how to best insure your employees and business with group income protection, a financial advisor can help provide more information and advice. An expert will understand policy details, know which terms are important for your specific business needs, and can help ensure you get corporation tax relief on premiums paid.

In addition, negotiating a group income protection insurance policy can be complex, and many insurers will only offer cover through a financial advisor – so an expert will be able to give you whole of market access and deals that you’ll be unable to get if you choose to go direct to a provider.

Make an enquiry or give us a call on 0808 189 0463 to be connected to one of the insurance experts we work with.

Our advisers are regulated by The Financial Conduct Authority and so you will be dealing with a highly trained person that adheres to strict rules of conduct.

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