Updated: December 11, 2019

Group Long Term Disability Insurance

What is Group Long-Term Disability Insurance and how does it work? Speak to an expert broker we work with to find out more.

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Richard Angliss

Author: Richard Angliss - Finance Expert

Updated: December 11, 2019

More and more employers are offering group long term disability insurance to their employees as part of their salary package.

To get an understanding of group long term disability insurance and how it may apply to your circumstances, it’s also useful to understand the difference between individual and group long term disability insurance.

In this article, we’ll look at the pros and cons of group long disability insurance. If you still have some questions or want to know more, you can arrange a free, no-obligation chat with one of the expert advisors we work with.

Group long term disability insurance definition

Simply put, group long term disability insurance will provide an employee with an income should they become unable to work for an extended period, due to illness or injury.

You can expect payments to commence after an agreed waiting period, which is usually about six months, which is similar to critical illness cover.

These payments can continue until either the employee returns to work, or they reach state pension age.

You may also be eligible for partial payments if you are only able to return on a part-time basis.

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Who offers group long term disability insurance?

It is becoming an increasingly popular benefit that more and more companies are offering their employees as part of their salary package.

If you’re an employer, then there are a number of providers and products on the market that could suit your individual needs, and the expert advisors we work with have a working relationship with all of them, so they can help you find the best deal.

Long term disability insurance – group vs. individual

The key benefit of a group long term disability insurance policy is that the requirement for a medical examination is not necessarily required.

This means that someone who may not qualify for an individual policy because of poor health, could qualify for a group long term disability insurance policy or a group critical illness policy that many employers also offer.

But if you’re fit and healthy enough to qualify for an individual policy, then you’ll be able to find deals that are significantly better, with more benefits and usually costing less.

This is why you need the right advice to find the best deal.

How much does group long term disability insurance cost?

Generally, the costs of providing cover for an employee range from 1% and 2% of gross payroll, but in the case of a limited-term plan, this can cost as little as 0.25%.

However, employers need to be aware of the common misconception that they will receive a group discount, and so the premiums will be lower.

This is not always the case, so it is good practice to look at the overall package. Many group long term disability insurance policies don’t offer the same level of benefits that an individual policy may offer, and in fact there are many individual long term disability insurance policies that offer more benefits, while costing less.

Depending on the provider, you could benefit from –

  • Free counselling for stress or mental health issues
  • Health and weight loss advice
  • Private medical treatment
  • Phone support for work-related health issues

If in doubt, contact one of the expert advisors we work with. They are whole-of-market, which is to say they have a working relationship with all providers, not just a select few, so they will be able to find the best deals.

What are the benefits of long term disability insurance to an employer?

One key benefit is that it makes employment with that particular company more attractive for potential employees and can therefore help your firm retain good staff.

Another benefit for employers is that by taking out group long term disability insurance, it can cover the employer’s contractual obligation to provide long term sick pay to employees.

Most policies are exempt from default retirement age legislation, which means the employer is no longer liable for payments when the employee becomes eligible for the state pension.

What are the benefits of group long term disability insurance to an employee?

When you consider that according to industry data, group long term disability insurance has helped over 250,000 families in 2018, paying out more than £1.26 billion in benefits, being covered makes real financial sense.

The main benefits are that most policies include –

  • Monthly payment based on a pre-agreed percentage of your salary
  • Programmes that help you when you return to work
  • Rehabilitation programmes (this may include physiotherapy treatments)
  • Modifications to your workplace (this could include customising equipment, desks, installation of ramps etc)
  • If you pass away while receiving benefits, your surviving partner may be eligible for the continuation of benefits for a set period.

Another option open to you is critical illness cover. This can ensure that you and your family are protected should you suffer debilitating illness and are unable to work.

You can arrange a chat with one of the advisors we work with, who will be able to guide you on the best options for your circumstance with the right advice.

Are there any tax implications with group long term disability insurance?

Yes. Employers can usually qualify for corporate tax relief on policies, as long as it is not a P11D benefit.

A P11D is a form that is used to report benefits in kind that an employee may receive in addition to their salary, such as health insurance, interest-free loans, company cars etc.

Is group long term disability different to critical illness and income protection?

Critical illness cover and income protection insurance are similar, in that they can provide an income while you are unable to work.

If you think these kinds of cover may be more suitable for your circumstances or needs, you can arrange a chat with one of the experts we work with, being whole-of-market they are sure to be able to find the best deal on critical illness cover to meet your individual needs.

Where can I find the right advice on group long term disability insurance?

We think the advisors we work are the best in the business, and our customers tend to agree.

Whether you’re an employer or an employee, they are experts when it comes to group long term disability insurance, and better still, they are whole-of-market, so they have access to all providers, not just a select few.

What that means to you is that they can find the right deal, with the best benefits and features at the right price.

You can call us on 0808 189 0463 or arrange a free, no obligation chat with one of the expert advisors we work with.

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 long-term disability 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.

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