John Letizia, head of public affairs at Unum, says income protection is the only type of financial protection to provide a regular replacement income should an individual go on long-term sick leave.
He says sick pay insurance just provides short-term financial support for sickness absence and can provide benefit from as little as one week’s absence.
This type of cover is designed to complement a business’ existing sick pay scheme, and Mr Letizia says it can dovetail perfectly with longer term income protection plans.
Critical illness insurance provides individuals with a tax free lump sum after they survive a covered critical condition such as a heart attack or stroke, helping to relieve some of the financial burden of serious illness.
Mr Letizia says this type of insurance can be used to cover the cost of medical expenses or mortgage repayments, for instance.
Without group income protection cover, Vanessa Sallows, benefits and governance director for corporate business at Legal & General, says the employer would either have to take the risk themselves or leave employees to rely on state benefits.
Without the rehabilitation support provided by GIP insurers, Ms Sallows says absences are likely to be longer, which has an impact on employees and the business.
Ultimately, Nick Homer, group protection manager of Zurich UK Life, says there are no other close alternatives to group income protection, other than self provision.
However he agrees that group critical illness cover can provide a lump sum benefit in respect of specific medical conditions.
