Close this search box.

Group Income Protection: What is it and why should you offer it?

April 3, 2023

The Ins and Outs

Income protection insurance is a type of insurance that replaces a portion of an individual’s income if they are unable to work due to an injury or illness. While this type of insurance is often associated with individual coverage, businesses can also offer Group Income Protection Insurance as an employee benefit.

It typically comes into effect from a minimum of 13 weeks after initial absence, depending on which policy a company chooses. It covers upwards of 50% of a person’s salary. In our experience most companies will choose a policy which begins after 13 weeks of absence at a rate of 75% of a person’s full salary.

Depending on your budget, you can offer Income Protection until the person retires. You also have the option to put a cap in payment which will reduce the premiums. 

Here are some of the benefits that a business can expect when they offer income protection insurance:

Attract & Retain Talent

Offering income protection insurance as an employee benefit can help businesses attract and retain top talent. Employees value benefits that provide financial security and make a difference to their life outside of the office. Since Income protection insurance covers a portion of a person’s salary in case of an unexpected illness or injury, it gives your employees peace of mind that they can take the time to heal and still pay their bills. By offering this type of insurance, businesses can set themselves apart from competitors and demonstrate that they care about the well-being of their employees.

Reduce Absenteeism

Injuries and illnesses can lead to extended absences from work, which can impact a business’s productivity and bottom line. Income protection insurance can help reduce absenteeism by providing financial support to employees who are unable to work due to an injury or illness. Since your employee does not have to worry about their finances, they will have less stress and more clear headspace to focus on their health. This can help employees get back to work faster and reduce the impact of absenteeism on the business.

Improve Employee Productivity

When employees feel secure and supported, they are more likely to be productive and engaged in their work. If employees are worried about their financial security, it can impact their productivity and motivation. This worry coupled with an on-going illness can lead to a level of stress that becomes distracting and has a further negative impact on their health. Income protection insurance can help alleviate these concerns and allow employees to focus on their work and take time away if needed. 

stress at work


Offering income protection insurance as an employee benefit can be a cost-effective way to provide financial security to employees. Group income protection policies can be more affordable than individual policies, and businesses may be able to negotiate better rates with insurance providers. This can help businesses provide valuable benefits to employees without breaking the bank.  Also, there are different levels of cover, and adjustments that can be made to ensure the benefit meets an employer’s budget. 

Supports the Employer

Whilst the benefit provides significant benefit to employees, it also supports the employer by reducing risk and liability.  Income Protection providers will comprehensively assess the claims to ensure their validity, and they will also support the employee in returning to work. The provider will assign a health specialist to asses the employee who will then help guide the process for the employees recovery. 

Offering group income protection also shows your company as an empathetic and supportive employer. People who work for your company will feel secure that if they have to take a long term leave of absence for medical reasons, they can still afford to pay the mortgage. And with the insurance in place, the company will not be liable for fitting that bill.  

There is also an element of time saving to providing group income protection. When processing and navigating an employee’s long term sick leave, the amount of work for the HR team is considerable. This  

Improved Employer Brand

In today’s competitive job market, it is important for businesses to have a strong employer brand. Offering income protection insurance as an employee benefit can help businesses improve their employer brand and attract top talent. This can lead to increased brand recognition, improved customer loyalty, and a more positive public image.

In conclusion, offering income protection insurance shows your employees that their health and well-being is in everyone’s best interest. The relationship between an employee and their company goes both ways, and if you are hopeful that your team will go above and beyond for you, you should be willing to go above and beyond for them.

Providing your team with a sense of financial security should they experience a longterm health or wellness issue helps businesses create a more secure and supportive workplace. And if your employees feel supported, you have a better chance of keeping them on board.

If adding Group Income Protection Insurance to your employee benefits program is of interest to you, do get in touch with one of our team. We can talk you through the options, the process and help you find a plan that meets bot the needs of your employees and the budget of your company.  

Bigmore - benefits logo