Many employers are not offering one of the most important benefits to protect their employees and their families according to research conducted by Jelf Employee Benefits.
Nearly 3 out of 4 respondents (74%) indicated that Income Protection insurance was of greater importance to their workforce than Life Assurance cover. Yet the majority of employers offer life cover as standard, with Income Protection coverage a very long way behind.
Income Protection is a vital insurance for employees, as it offers a continuation of the employee’s income should the employee be off work long-term through illness or injury. Whilst this has always been of value, this is now ever more important as new legislation creates further barriers to the long term sick claiming state benefits.
Commenting on the findings, Steve Herbert, head of benefits strategy for Jelf Employee Benefits said:
“It’s clear from our research that employers accept that Income Protection cover is the most relevant employee benefit for their workforce. Despite this fact, less than half of companies (47%) offer this benefit currently.
“Conversely, we found that life assurance was a benefit on offer via a much larger number of employers (82%), even though employees are some three times more likely to be off work with a long-term illness than die. This is a strange mismatch, and one that employer’s really should seek to address.
“What’s more, even where an Income Protection policy has been put in place by an employer, it often only covers senior employees. It’s generally accepted by the industry that only 1 in 10 private sector employees are actually covered by an Income Protection policy.”
Social demographics have moved on, people are living longer, and many illnesses are now treatable that haven’t been in the past. As a result Income Protection may now be more relevant than previously, and Jelf Employee Benefits is advising employers to bring their benefits up to date to reflect the changing needs of their workforce.
Income Protection is a key benefit, as without continued income, an ill employee will often struggle to meet their financial commitments, thus adding financial problems and related stresses to the existing medical issues. This can be devastating for the wellbeing of the employee and their family.
In conclusion Herbert said:
“There is a lack of understanding among both employers and employees in terms of what Income Protection actually involves, and the important benefits it can offer. In our view it is a vital component of a benefits package for the 21st century, and is one of the most important benefits an employer can offer.
“We believe that employers may be failing their employees by not offering it.”
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