Group Income Protection

This kind of insurance is designed to provide a replacement income if illness or injury prevent someone from working for a long period of time.

Mostly it is used by an employer to finance an entitlement to occupational sick pay which arises out of the contract of employment issued to their staff.

The employer gets corporation tax relief on premiums. Benefits are paid to them to be forwarded to the employee through their payroll system. The employees pay income tax and NI contributions on the occupational sick pay they receive.

It is possible for the employer to insure pension contributions and NI contributions in addition to the basic income benefit.

The insurance benefit becomes payable when the member has been ill for some while . Benefits become payable after the end of that waiting period which is known as the deferred period. Typically this will be about 6 months but longer or shorter periods are available.

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