Looking to compare providers to keep your employees’ salaries safe during tough times? Look no further. In this guide, we’ll cover how income protection (IP) can give your employees peace of mind, the difference between income protection and life insurance, and how to find the right insurance provider for your business. Let’s get into it.
What is income protection insurance?
IP insurance is one of the ‘big four’ employee benefit insurances (alongside healthcare, pension and life insurance). It’s designed to cover you if you can’t work because of illness or injury, making sure you get a regular income before you return to work or until you reach retirement age.
The other three insurances are pensions, private medical insurance and life insurance. Between them, they can help to keep your employees stress-free and safe in the knowledge that their finances will be taken care of if life doesn’t go to plan.
What’s the difference between income protection and life insurance?
The key difference is that life insurance pays out when a person dies, whereas income protection makes regular payments when a person can't work due to sickness or injury.
Not sure which is right for you or your employees? Life insurance and income protection can work in tandem to provide a holistic level of cover, but if you have dependents (like children or sick relatives) or debt (like a mortgage) then life insurance is a must.
Similarly, if your life relies heavily upon your earnings, you might want to consider income protection. Work out your average monthly expenses and think about how you’d cover them if you stopped earning – if you couldn’t afford to pay for necessities like bills or food, income protection could lend a helping hand.
Whether you choose to invest in one or both types of insurance, it’s a very personal choice. If you’re unsure, speak to one of Ben’s expert benefits consultants.
How to measure top income protection providers
Before you start researching IP providers, remember that – as with any company – they all have different aptitudes for risk and different attitudes towards customer care. So it’s important to draw your own comparisons to find the best fit for your organisation.
The best thing to do when comparing insurers is to look at:
- The percentage of income covered
- The claim payout rate
Depending on the provider, you can cover up to 70% of your gross income, but most insurers offer closer to 60%. Remember that some insurers cap the maximum amount of IP cover they’ll provide in relation to your salary. Aviva, for example, will cover 65% of the first £60,000 you earn each year, and 45% of any annual income beyond that.
The good news is that the successful payout rate for IP insurers is high across the market. Hopefully this gives you some reassurance that your plan – if you choose to take one out – will pay out in the event that you can’t work due to illness or injury. You can compare the percentage of claim payouts across insurers here.
Our top income protection providers
At Ben, we partner with a wide range of IP providers to give you maximum choice. Explore the benefits of each insurer to make an informed decision on which is right for your business and employees.
Anorak
Anorak is an independent online broker for life insurance, income protection and critical illness cover. They offer a simple, convenient way to get free expert advice and buy cover online. They do a quick assessment to help them recommend the right amount of cover based on your unique needs. Then, they work with you to make sure you choose a sufficient level of cover – without paying more in premiums than you need to.
Macif
Multi-business insurance with mutualist values, French business MACIF brings together nearly 5.7 million members, members and customers who pool their risks to protect what is essential to everyone: their life, their loved ones, their property.
Vitality
Vitality aims to be the best at everything they do, offering comprehensive and award-winning Health and Life cover and positively different investments to our members. You can access a panel of support services to help your recovery when you claim, including physio, therapy and cancer support. Plus, boost your monthly payout for up to six months by looking after your health.
Zurich
When it comes to income protection, Zurich guarantees the monthly benefit you've chosen, up to £1500, even if your salary drops. Their team of expert nurses will help with your recovery and pay for your treatment if necessary. And if you return to work but earn less than your normal salary, they’ll top up some of the difference for up to two years.
AIG
AIG is a leading global insurance organisation covering 80 countries. They provide life insurance, pension and other financial services to support employees in business and in life. AIG’ cover a wide range of customers who apply for income protection, including former cancer sufferers, those living with diabetes and house persons, and they regularly look at how medical advancements can help them improve their offering.
Canada Life
Canada Life’s aim is to help individuals and families enjoy a financially rewarding future through their wide range of innovative solutions. You can cover up to 75% of employees’ salaries as well as gain access to their early intervention team, who’ll help employers manage workplace absence.
YuLife
Engage, reward and protect your employees with income protection, critical illness cover and life insurance from YuLife. 24/7 mental health support and rehabilitation with a medically qualified and vocationally experienced team means employees have the right service at the right time to keep absence at bay. Plus, they offer workshops for HR covering topics such as the menopause, managing neurodiversity and occupational burnout.
In a world where very little is within our control, giving your employees peace of mind with income protection insurance is one of the best things you can do. Explore the providers on offer at Ben, and when you’re ready, book a demo with one of our consultants who’ll help you find the perfect package for your staff – as well as save time and money.