Zurich has launched a flexible group income protection (GIP) plan aimed at organisations with at least 250 employees. Key features of the new plan are:
* Employees get a core level of cover, which they can increase to meet their needs and budget.
* Minimum insured benefit is usually 25% of salary.
* Maximum insured benefit is the lower of 80%of salary or £350,000.
* There is a choice of benefit payment periods of 2, 3, 4 or 5 years or to policy terminating age.
* Employees can change their benefits at an annual window or following a lifestyle event to tailor their cover to their changing circumstances.
* Employees aged 16-69 can be covered.
* An initial rate guarantee period applies – usually two years.
Being a flexible benefit, employers can have greater control of their costs and benefits, so maximising sustainability as well as affordability. At the same time, employees can choose which level of benefit is right for them, and change that s their needs change.
What They Say
Corporate risk propositions manager Nick Homer said: "Providing GIP cover via a flexible benefits arrangement can be very beneficial for both employers and employees. For example, the employer still receives all the benefits of GIP, including rehabilitation support, without having to offer full cover as standard. Flexible benefits arrangements are increasingly favoured by larger employers, because they enable a wide range of employee benefits to be offered, whilst also helping employers to control their overall benefits spend. A flexible benefits arrangement can also help increase employee engagement, awareness and appreciation of the benefits available to them."
What We Say
"Flex schemes encourage employers to provide wider employee benefits packages than they otherwise might, also enabling them to best manage the benefits employees must have, and what they can have, and keeping costs affordable and sustainable. For employees, they can choose only as much cover as they want, and change that as their circumstances and budgets change.
"Reading the literature, it’s unusual to see ‘bare’ protection insurance outlined, without any of the extra benefits that individual customers now expect to see spelled out. In practice though, group risk insurers will help in ways other than purely financial – not least because they have a financial incentive to get people back to work – as do employers and employees themselves. Indeed, Zurich also produces a guide for employees outlining the rehabilitation and return to work advice process when a claim is made. However, the language used in that is rather ‘cold’ and too insurer-focused.
"Overall though, this plan looks to be a straightforward GIP proposition, with cost, flexibility and service determining whether it will be on a firm’s shortlist."