A Guide to Group Income Protection Insurance | Spectrum Financial Advice
Date: 18 January 2022 Author: Lewis Cable
Spectrum Financial Advice Guide to Group Income Protection Insurance

Spectrum Financial Advice Guide to Group Income Protection Insurance

What is group income protection? Learn everything you should know about group income protection schemes in our comprehensive guide to group income protection insurance.

Group Income Protection Insurance


  • Spectrum FA Guide to Group Income Protection Insurance
  • What are Group Protection Schemes?
  • What is Group Income Protection, Who Should Have it and Why?
  • How Does Group Income Insurance Work?
  • Types of Policy
  • What are “Index-Linked” Policies?
  • When Do Policies Pay Out?
  • How Much Will the Premiums for a Policy Cost?
  • How Can Spectrum FA Help with Your Group Income Protection Scheme?

Spectrum FA Guide to Group Income Protection Insurance

With our in-depth knowledge of group protection schemes and many years of experience in assisting companies across all industries set up such schemes for their employees, Spectrum FA are experts in group income protection schemes. If you are considering such a scheme, you will probably be wondering what exactly group income protection is, how it works and how much it will cost your company to protect your workforce in this manner. This comprehensive guide to group income protection insurance will answer all these questions.

Contact Spectrum FA to learn more about ways to protect your employees.

What are Group Protection Schemes?

No business, regardless of size or industry, can function without their employees. As such, your employees are your business’ most important and valuable resource and looking after this resource is imperative for your company’s future success and growth.

Offering group protection schemes as part of your wider employee benefits package is an excellent way of doing so, because they provide your workforce with peace of mind that their families will be provided for if anything unforeseen should happen to them.

Different types of group protection insurance currently include group critical illness insurancegroup life insurance and, of course, group income protection insurance, which this guide concentrates on.

Not sure which type of group protection to offer your employees? Contact Spectrum FA for guidance and a free review of your business’ unique requirements (no obligation).

What is Group Income Protection, Who Should Have it and Why?

Taken out on behalf of your workforce by your company (who will be the policyholder and responsible for paying premiums) this type of group protection policy covers your employees in the event of an illness or injury rendering them incapable of going to work for prolonged periods.

Losing an income due to a prolonged illness or a serious injury, can have potentially devastating consequences for your employees and their families.

Knowing their families will not suffer these financial consequences if they should sustain an injury or become seriously ill, will put employees’ minds at rest, allow them to concentrate better and consequently improve their productivity – which will, of course, be reflected in your business’ profitability.

Improving your workforce’s morale/attitude, increasing their loyalty to your company and enhancing your reputation as a responsible, supportive employer, this could also make it significantly easier for your company to retain existing and recruit new high-calibre ‘talent’.

Beneficial not only to employees but also their employers, group income insurance is therefore an area all companies with employees should take into consideration. Request a review (free & without obligation to proceed) now.

How Does Group Income Insurance Work?

Providing employers/employees with pre-determined monthly payments, group income policies mitigate the potential financial ramifications of losing an income due to illness or injury.

Made for a pre-determined period, these payments:

  • Typically consist of a percentage (which may range up to 70% with certain providers) of named employees’ average gross incomes
  • Once paid to the employee, can be used to help cover mortgage/rent payments; utilities, loan/credit card repayments and other household expenses.

Payments usually start after a so-called deferred (waiting) period, the length of which will partly depend on any given policy’s “built-in” deferral period – which typically ranges between 8 and 52 weeks from the date an employee first became injured/too ill to work.

There are also many optional add-ons/extras. Learn more/request a review.

Types of Policy

Different types of income protection policy include:

  • Short-term policies, which typically have low premiums, very short or no deferred periods at all and will pay out for 12 – 24 months;
  • Long-term policies, which provide payments for a longer period of time. Certain providers will pay this benefit for up to 60 months and some may offer longer periods
  • “Index-linked” policies

Contact Spectrum FA for advice on which type of policy is most suitable for your employees.

What are “Index-Linked” Policies?

While your employees are working, it is likely you will be gradually increasing their income to keep in line with the ever-increasing cost of living.

If, however, you need to make a claim on a group income policy and their pay-out is based solely on their income at the time your company took out the policy (i.e. without taking inflation into account), you could find that their cover’s value has decreased over the years and may not fully cover their bills and other expenses.

“Index-linking” your policy can prevent such situations from arising by increasing prospective pay-outs year-on-year in relation to the measure of inflation (index) it is linked to. This could, for example, be the consumer prices or retail prices index (CPI or RPI).

Please get in touch to discuss what optional extras should be included in your policy. Contact us to learn more.

When Do Policies Pay Out?

Upon acceptance of a claim (which may depend on how a given insurer defines an employee’s “inability to work”, (please contact us for more detailed information on this), policies will start to pay out at the end of the pre-determined (or built-in) deferred period. Learn more.

How Much Will the Premiums for a Policy Cost?

The price of group income protection premiums varies between insurers, as well as depending on your selected type of policy and the:

  • Number of employees insured
  • Level of cover (i.e. the size of pay-outs; the higher this level is, the higher premiums will be)
  • Deferred period (longer deferred periods usually mean lower premiums)
  • Duration of payments (i.e. for how long employees will receive payments; the longer this duration, the higher premiums will be)
  • Optional add-ons/extras to be included

Other factors used to determine the cost of premiums include insured employees’:

  • Ages – Older applicants are deemed more likely to become ill by insurers and premiums will reflect this.
  • Occupations/Roles within Your Company – Some occupations/roles within a company expose employees to greater risks (i.e. potentially serious accidents at work, high stress levels, physical assaults and/or infections) than others. Such high-risk occupations may include, for example:
  • Construction, civil engineering and/or mining
  • Roofing, electrical services/contractors and/or scaffolding
  • Manufacturing, carpentry and/or commercial fishing
  • Waste management, agriculture (farming, forestry) and/or plumbing
  • Oil industry-related occupations (i.e. platform or refinery workers)
  • Haulage, delivery and/or private/public transport services
  • Protective services (i.e. police, security, fire/prison services and/or armed forces)
  • Paramedic/ambulance, nursing and/or other health/social care services
  • Public administration, teaching and/or high-level management
  • Vehicle maintenance/repairs, hotel/catering services and/or retail

Spectrum FA can assist you and will arrange comprehensive cover for your employees at affordable premiums. Contact us to discover how.

How Can Spectrum FA Help with Your Group Income Protection Scheme?

We are very much aware that every company and every employee’s needs are totally unique.

Offering tailored services, we will therefore review your company and its employees’ situation/s and specific needs – free of charge and without any obligation for you to obtain a policy through us – before recommending any policies to you.

Once we have determined your unique requirements, we will recommend suitable policies from market leading insurers. We will also ensure that the policy is competitively priced.

Upon your acceptance of our recommendations, we will then guide you through every step and will liaise with the chosen provider to ensure a suitable group income protection scheme it put into place. Contact us now to learn more and/or request an appointment for your company’s free review.

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