Voluntary Group Income Protection plans offered by Personal Group are changing the future of income protection available to individual employees.
VGIPs enable employees to receive a regular monthly income benefit if they are sick or injured and unable to work for a continuous period and by encouraging groups of employees to join the scheme, members benefit from reduced premiums and increased cover.
“VGIPs are designed to provide an affordable income protection solution for skilled and semi-skilled workers. The premiums are paid by the employee via salary sacrifice and this means the monthly payments are net of income tax and national insurance contributions making the contributions very affordable.”
“In addition the employer also saves their national insurance contribution on the amount of premium being sacrificed.”
“The plan provides cover for employees in cases of long term sickness, so they are covered well after their statutory sick pay runs out. Each scheme is designed to complement the employer’s existing sick pay arrangements,” explains Katrine Johnston, Key Account Director at Personal Group.
“The scheme also works out on average to be 30% to 40% cheaper than if an employee was to source income protection themselves. The more people who are involved in the scheme helps mitigate the insurance risk and this is reflected in the reduced cost for participants,” she continues.
VGIP key facts:
VGIP provides a regular monthly benefit it you are sick and disabled for a continuous period. It also provides a lump sum if you are likely to remain incapacitated for the remainder of your life.
The regular monthly benefits are paid after a pre-determined deferment period which dovetails with the employer’s existing sick pay arrangements and are payable – subject to meeting the incapacity definition of the plan – from 2 and up to 5 years, depending on the options chosen.
If policyholders continue to be incapacitated after this time and will remain so for the remainder of their life, they will receive a lump sum equivalent to 12 times the basic monthly benefit.
Should individuals return to work following prolonged periods of illness, VGIP offers to pay up to 75% of an employee’s original salary if they return to a job that is lesser paid than their previous one.
Once a pre-agreed percentage of employees in an organisation are signed up to the scheme, there is no medical underwriting. Therefore, previous or current medical conditions are not a deciding factor for getting cover.
“VGIPs not only benefit employees, but they also act as a great tool for employers to recruit, retain and reward staff, giving employees the confidence that their income will be protected should they become sick or injured for a prolonged period of time,” adds Johnston.
VGIPs are underwritten by Unum Limited, the biggest income protection provider in the United Kingdom. Personal Group is the only company offering VGIP protection in the UK.