INSURANCE

Group IPI

Group income protection insurance, or IPI, may be offered as a benefit of employment through small companies or large businesses. Although there are restrictions connected to IPI, it helps to protect employees against the loss of their income if they should become unable to work for health related reasons. If an employee suffers an injury or illness or is involved in an accident, IPI payouts could replace a percentage of his or her income until he or she is able to resume working, retires or passes away, or until the coverage period ends.

IPI is not a substitute for Statutory Sick Pay (SSP) or Employment and Support Allowance (ESA). These state funded benefits are provided by the government to assist employees if they are unable to work because of an illness or injury. Employees may collect SSP for up to 7 months after they have been unable to work for 4 or more days in a row. After SSP benefits end, employees may receive ESA if they are still incapable of working. IPI payouts are intended to be a supplement rather than a substitute for state benefits.

Benefits for Employers

Income protection insurance offers a number of benefits for employers. With benefits like IPI, private health insurance or life insurance, employers can attract the top personnel in their field. IPI benefits give smaller companies an advantage when they're competing with larger businesses for the best employees. Having IPI as a benefit may also boost staff morale and reduce the rate of employee turnover.

As an additional benefit, businesses may deduct the costs of IPI premiums from their taxes. This benefit offers an incentive to smaller employers who might otherwise be unable to afford to offer IPI. In addition, group IPI premiums are generally quite affordable because group policies cover a number of individuals rather than a single policyholder. Group coverage distributes the risk among a larger number of people, reducing the cost to the employer.

Advantages for Employees

Employees may benefit from group IPI if they are injured or fall ill and cannot work for an extended period of time. The length of time before payouts begin will depend on the duration of the deferred period. The deferred period, which is established when a business purchases income protection insurance, may range from a number of days to a matter of weeks, depending on the employees' needs.

IPI benefits are not subject to income tax, which means that employees may use the entire payout to cover expenses like rent or mortgage payments, food, transport, auto loans, credit cards and other personal bills. The payouts from an IPI policy can fill the gap between state benefits and the employee's regular income, giving your staff greater peace of mind and a sense of security about their financial future. If an employee resigns from a company because of an illness or injury, however, group IPI benefits may no longer apply.

IPI is not available to employees who resign voluntarily for reasons unrelated to health, or for those who are disabled by a self inflicted injury or substance abuse. IPI payouts are not paid out for pregnancy. When a business offers group IPI to its employees, benefits should be clearly explained to avoid misunderstandings. Employees should be encouraged to review the policy wording carefully so that they understand the exclusions and restrictions of IPI as well as its benefits.

Group IPI offers a number of important advantages to employees and employers alike. Businesses that wish to reinforce staff loyalty with an inclusive benefits package will appreciate being able to offer IPI to their team. Employees will appreciate the sense of reassurance that having group IPI can provide.

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