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        Updated: April 20, 2024

        Group Income Protection Pros and Cons

        If you're interested in Group Income Protection, this guide will outline all the pros and cons so you can make an informed decision

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        We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in group income insurance. Ask us a question and we'll get the best expert to help.

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        No impact on your credit score

        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.

        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

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        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.

        Ask a quick question

        We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in group income insurance. Ask us a question and we'll get the best expert to help.

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        Richard Angliss

        Richard Angliss

        Finance Expert

        About the author

        Richard Angliss has made a career in financial services which stretches over 40 years.

        His early career was spent learning about the various financial products and applying them to prudent advice, working for one of the largest life assurance and investment firms. After that he joined the financial services arm of a very well-known firm providing independent advice to their 8 million customers.

        For the last 20 years he has been involved in building software solutions that help Advisers and clients work together to achieve good financial outcomes and helping to set up three independent advisory firms. He also has written many articles for financial services publications and provided commentary for newspaper journalists.

        At an early stage in his career he realised the great satisfaction that comes with being able to help people achieve their goals and protect their families. “Regulation of financial services has hugely impacted on ensuring people get appropriate advice. The issue these days is access to that advice and just as importantly regular reviews to make sure that everything stays on track”.

        With the growing development of online resources such as Online Money Advisor he sees a great future for people to access advice to make their pension and investment work harder for them.  Plus, of course, to ensure they have insurance products in place that will be required when unforeseen events happen.

        He knows getting that balance right is crucial to prudent financial planning and the wellbeing of individuals and their families.

        FCA Disclaimer

        *Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

        Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.