Group Income Protection - What is it and how does it work?

 

What is Group Income Protection Insurance?

Group Income Protection, also known as Personal Accident Cover, Group Risk Insurance or Group Salary Continuance is an insurance policy taken out by a corporation on behalf of it's employees. The policy will protect the employee’s income in the event of total or partial disability, caused by accidental injury or sickness, 24 hours a day and 7 days per week.


The employees are the beneficiaries of these policies.


In a similar way to insuring your car or house, an income protection policy insures an employee’s future earning capacity.


Aren't employees incomes already sufficiently protected through Workers Compensation?

 

Workers Compensation will not cover your employees for non work related sickness, nor will it cover them for accidental injuries that happen outside of the workplace.


Unfortunately, even if an employee has a work related sickness or accidental injury occurring in the workplace, they will only be covered for the legislated amount in your state. You cannot choose the rate of cover.


For example; should an employee have an accident at work in NSW they will get paid at the current prescribed weekly wage for their profession for 26 weeks, then at the statutory rate thereafter until you return to work. Currently the statutory rate is around $409.10 per week*.


Considering many employees are earn well above the current weekly wage, and that there is generally no compensation for lost overtime, bonuses or other income, right off the bat it would be quite difficult to meet regular rental or mortgage repayments and other financial commitments. After 26 weeks have passed and the statutory rate of $409.10 per week* is introduced - it would become even more difficult for your employee and their family financially.


* The statutory rate is provided under Section 37 of the Workers Compensation Act 1987, the rate of $409.10 is applicable from 01/10/2010 to 31/03/2011)


Put simply, an income protection policy protects and employee's real earning capacity and allows them to maintain their standard of living during a time when they really need to be worrying about their health, not their bank balance.

 

The benefits of purchasing as a Group

It is true that employees can take out individual income protection policies, however without the power of a group purchase behind them, their standalone policies will be much less affordable and will generally provide less benefits.

 

The key benefit of purchasing as a group is that an insurer will charge a greatly reduced premium per person for a very high quality policy. Generous policy features can also be negotiated and included at very minimal additional charge and in some cases no additional charge.


Some examples of non-traditional benefits that can be integrated into Group Income Protection policy include:

  • Rehabilitation and return to work assistance
  • Loss of life benefits
  • Funeral benefits
  • Bill payment assistance (should an employee become redundant the insurer can assist with bill payments for up to three months)
  • Workers Compensation Top Up (Payment of the difference between your workers compensation payments and your actual wage)
  • Homemaker assistance
  • Reduced waiting periods and increased coverage limits

Another great benefit of purchasing as a group is you pay a single rate to cover each of your employees regardless of their age, skills, or rate of pay, and no individual applications or medical assessments are required.

 

A highly regarded employee benefit

Group Income Protection Insurance is one of the most highly regarded and requested employee benefits. Many groups of employees will actually negotiate with employers to provide this insurance, as it offers employees real protection for themselves and their families should the need arise.


At Coverforce, when we set up a Group Income Protection Policy for an employer we are available to go out to their place of work and deliver a presentation to all their employees so they understand what this really means for them.


More Information

Arranging a Group Income Protection Policy for your workplace through UCover is a quick and simple process for businesses of all sizes.

 

For further information please download the WageGuard Product Disclosure Statement (PDS).

 

To obtain a quotation or further information please contact one of our experienced client relations managers on 1300 UCOVER. Alternately, you can complete a quote request online and we'll get back to you.