This is Ellipse’s second group income protection (GIP) product. Its first, InteractPlus, launched earlier in 2012, offers GIP benefits with an integrated absence management system.
This plan is a simpler, more traditional version, aimed at small groups from two to 300 members, with quotes available online.
To incentivise prompt absence reporting (which enables the insurer to intervene if necessary and helps workers get back to work quickly), employers get a 10% discount off the following year’s premiums if they notify all four-week plus absences before the end of the fifth week of absence. The discount also applies if there have been no four-week plus absences.
The plan itself pays up to 75% of salary (plus a percentage of employer and employee pension contributions and employer National Insurance contributions). Various deductions in respect of state benefits can also be applied. Premiums are usually guaranteed for two years and are payable monthly or quarterly. Premiums are single premium age related, and have been gender neutral since the plan was launched. Maximum benefit is £350,000 a year.
Benefits can run up to age 70 or can be limited to two, three, four or five years. Deferred periods of 4, 8, 13, 26, 41 or 52 weeks are available, there is a choice of four incapacity definitions (own or suited occupation, own switching to suited after two years and activities of daily working) and various escalation options may also be chosen. Free cover (automated acceptance) limits up to £125,000 a year are also available.
What They Say
CEO John Ritchie said: “Offering GIP without some mechanism for either guaranteeing or maximising the chances of absences being notified quickly just doesn’t make sense. The process is critical, as we need to ensure appropriate, professional intervention can happen early enough to make a difference.
"We still see InteractPlus as our flagship product because the integration of an absence management process with income protection guarantees that we hear about potential long-term absences early enough. Like all unique products, though, it can be tricky for advisers to compare with the other market offers. They have asked us for a more conventional option, which is what Interact provides, without departing from our core belief in getting early claims notification.
"Small companies come to us because we offer a fast, straightforward service, including a Master Trust facility, with no policy fees or minimum premium levels to artificially increase their costs.”
What We Say
This plan is aimed at firms that want conventional GIP cover, with the 10% early reporting discount effectively a form of loyalty bonus and/or an incentive to move towards full sickness absence management.
In some ways it is an odd mix – and late reporting of just one claim could result in losing the 10% discount, which is an issue given that there could be less than a one week window in which to report such events. That’s a double edged sword though – as it rewards good record keeping and illustrates how early reporting is actually in everyone’s interests.
In practice, advisers may choose to quote for Interact when recommending InteractPlus, if only to help put the latter’s pricing and benefits into context.