Insurer Unum shakes up income protection market

There is a new breed of income protection employee benefit contract being introduced into the market to help HR Managers more easily manage sickness in the workplace.

Unum, the UK’s leading disability insurer, has announced the launch of a unique new product called ‘Dual Benefit’ Group Income Protection.

Quotes will be available from 1 April 2008.

The ‘Dual Benefit’ name centres on the fact that, unlike other products on the market, it provides financial income benefits to both the employer and employee.

The product has been designed with the help of employers and is a result of Unum listening to its customers.

The employer can receive benefit in the form of an automatic monthly Business Income Benefit, which provides them with additional finance to manage the long-term absence of an employee.

It can be used, for example, to help an employer finance temporary replacement staff or carry out reasonable adjustments to the workplace in order to facilitate the return of a disabled employee.

Unum’s research also showed that most employers are keen to provide extra financial support for severely incapacitated employees in addition to the regular income replacement amounts traditionally paid to the employee.

Therefore, Dual Benefit will also provide an extra automatic lump sum payment on the expiry of the income benefit period if the employee remains incapacitated from one of a number of serious illnesses described in the policy.

On the employee side, research conducted by Unum during the creation of the product revealed that small to medium businesses tend to regard long-term absence as anything over two weeks.

As a result, for its Dual Benefit GIP Unum is the first insurer to add new four and eight week deferred period options to its standard 13 and 26 week ones in the business market.

 The policy will provide businesses with extra safeguards to help manage and reduce the chances of a potentially damaging disability related claim as it:

Provides a period of medical assessment and occupational evaluation
Provides finance for temporary replacement costs
Provides a termination payment if there is no return to work
During the payment period it provides assistance with professional rehabilitation services

Employers can choose to select a Pay Direct version of the policy that allows Unum to pay the income benefit directly to an employee who is unable to return to work and has left their organisation.

Wojciech Dochan, Head of Commercial Marketing, Unum, said: “Dual Benefit GIP was created following extensive qualitative research with both business decision makers and IFAs and we feel confident that there is a real market for this product.

“At one time or another most businesses will need to manage the prolonged absence of an employee.  Although most absences are for short periods of time, a good number are for longer durations and the costs and risks to the business of coping with a long-term absence can be significant.  This product will help them to mitigate these risks and improve business continuity.”

As with all of Unum’s GIP products, its in-house team of Vocational Rehabilitation Consultants will be on hand to assist in the rehabilitation of an incapacitated employee where appropriate.

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