Cost of absence

Long term employee absence can take a heavy toll on a company's productivity, and consequently its bottom line. In addition to bearing the basic costs of the employee's salary and temporary cover, the employer may be required to adapt the workplace, implement a positive rehabilitation strategy and operate a policy of support for employees who have become incapacitated - so the initial cost of an absence can become substantial.

• On average, 7.4 working days per employee per year are lost due to sickness absence.
• On average, the cost of absence per employee per year is £692.
• Only a third of employers have an employee well-being strategy in place.

*Source:CIPD Annual Survey Report, Absence Management, 2009.

Why should employers provide Group Income Protection?

Canada Life Group Income Protection is designed to help employers to manage long term sickness absence more effectively. By providing a guaranteed income for employees who are unable to work as a result of illness or injury, an employer can help to financially support them through what can be an emotionally and financially stressful time.

When income is protected in this way, the employee's pension, National Insurance contributions and retirement plans can be maintained, despite the break in normal salary payments.

We believe that Group Income Protection is not just about paying claims - it is about supporting an organisation's workforce in all aspects of life. Our approach ensures that you and your people have the right support and expertise every step of the way. We offer a range of services which aim to reduce the risk of an employee being long-term absent, and can also provide access to rehabilitation specialists to support employees as they plan to return to work.

Our Working Well range of servcies sits alongside our Group Income Protection arrangement and provides a range of services aimed at both the employer and the employee. Visit Working Well services for more information.

Product features

Group Income Protection benefits can be provided in many different forms, often as a percentage of the employee's gross pay after adjustment for the level of State incapacity benefit. The benefit is paid to the employer who deducts tax and National Insurance before passing it on to the employee.

Benefits may also be protected against inflation by including an escalation option. This means that any benefit payable will increase over time at an agreed rate or in line with RPI, to a maximum of 5%.

Flexible free cover limits are often available and temporary cover will normally be available to protect the employee through the underwriting period.

An employee's lump sum option is also available, which enables the employer to provide a lump sum of benefit at the end of a limited benefit payment term.

Benefits for your clients

• ‘One-time’ underwriting
• Financial assistance at a reasonable cost
• Promote good employer-employee relations
• Enjoy tax relief on contributions
• Fast and efficient customer service from Canada Life's team of group risk experts
• Include cover for company pension scheme contributions and employers’ NI contributions
• Strategic advice and management of absenteeism
• Expert support in managing rehabilitation
• Working Well services - BusinessCare, AbsenceFirst and access to our Claims Management Services.

Benefits for your clients’ employees

• Financial reassurance when it’s really needed
• Advice and assistance services
• Help and support during rehabilitation
• No benefit-in-kind tax penalties
• Additional cover for pension contributions
• Continued disability cover without further medical evidence
• Working Well services - EmployeeCare and Best Doctors.

The information regarding taxation is based on our understanding of current legislation, which may be altered and depends on the individual’s financial circumstances.

If you would like more information on setting up a Group Income Protection scheme for a client, click here to go to the "Setting Up a Scheme" page, or call us on 0845 223 8000.

Resources

Group Income Protection Technical Guide

Group Income Protection Sales Brochure

Group Income Protection Product Features