According to the latest Office for National Statistics data, in the three months leading up to January 2016 there were 31.42 million people in work in the UK. As we know, an individual’s job takes up a significant part of their life and contributes heavily to their self-worth, which means that an employee’s long-term health and wellbeing is not only important for them, but also for their employer and the UK economy as a whole.
Fortunately, most financial advisers are adept at providing employers with group income protection policies that offer benefits when an employee is off work due to a long-term illness or injury. New Legal & General research shows that 35% of employees knew someone who had been off work for four weeks or more in the last year, and this, coupled with only 24% of employees knowing that Statutory Sick Pay is less than £100 per week, makes income protection policies like these an important consideration for both parties.
Common benefits of group income protection range from rehabilitation services that help the employee return to work more quickly through to additional income whilst they are unable to work. Alongside these benefits, however, employers should also consider policies which support their employees whilst they are still in work – and which help to prevent the need to take time off – rather than focusing on how to manage an absence once it has taken place.
At the moment, group protection providers are often put on a list and scored against one other in a number of broad categories, but this rating system often fails to identify the provider that is most suitable for a client’s particular circumstances. As a result, in most cases, only the top two or three providers are invited to meet the employer, as they are the only ones to reach a certain benchmark.
For obvious reasons, this process potentially limits clients to an inadequate pool of options. By restricting the client to just two or three policies which may not completely suit their needs, they may be left trying to shoe-horn a particular health and wellbeing strategy into their business, rather than choosing one which could offer a natural fit.
A better approach would be to move away from the broking of group protection policies and towards a more integrated process with the client instead. The decision to involve a greater number of potential providers in initial conversations with a client from the outset has multiple benefits, not just for the employer, but also for the adviser.
The primary benefit of this approach is that providers and advisers are able to sit down with the client and work with them to understand exactly what they require for their business and employees. No single income protection policy will be completely perfect for the needs of every employer, so conversations such as these allow for the creation of a meaningful partnership between client, adviser and provider, so that a bespoke policy which benefits that particular client can be created.
In Legal & General’s experience, this level of personalisation is vital. Many of today’s employers only consider policies which deal with the effects of an employee being off work long-term, with additional sick pay and rehabilitation therapy, for example. While there is no doubt about the importance of this approach, would it not be just as beneficial if employers were to prioritise the health and wellbeing of their staff while they were still healthy and in work?
Having an integrated process in place that focuses on health awareness, intervention and education will ensure that all parties have the tools, resources and information they need to stay healthy – as well as a clear plan for rehabilitation if an unexpected illness does occur, so that they can return to work as quickly as possible. This can be achieved by joining up provisions such as life insurance, group income protection and group critical illness cover and liability products.
This approach not only offers clear benefits for employers and employees, but for advisers as well. By opening up communication in this way, advisers will be able to introduce their clients to providers that offer a similar culture fit, which will help them to achieve their long-term goals for employee health and wellbeing. In addition, a carefully-crafted policy, successfully delivered by a well-matched provider, will ensure that the client returns for further advice in future.
By removing the commoditisation which exists today in this market, advisers stand to form better long-term relationships and receive repeat business. At the same time, employers will be able to guard against a loss of productivity, since their employees’ enhanced health and wellbeing will result in a happier, healthier workforce that is able to spend more time at work.
Martin Noone is managing director of Legal & General’s Workplace Health & Protection Business