ProtectionDec 17 2015

Rehab through income protection saves state cash: Zurich

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Rehab through income protection saves state cash: Zurich

Rehabilitation through group income protection has wider benefits for individuals, employers and the state, according to Zurich.

A report from the provider found every £1 spent on rehabilitation to support the long-term sick and disabled generates benefits totalling £16.80 for individuals, taxpayers, employers and insurers.

Independent economist Kyla Malcolm valued this support at around £110m per year.

Of this, Zurich said around £74m directly benefits:

• individuals, who are able to return to work and benefit from their original earnings - £5m gain;

• the tax payer, through higher tax revenues and lower welfare payments from the individual being back at work - £27m gain;

• the employer, through savings in occupational sick payments - £17m gain;

• insurers, as fewer income protection payments made, which reduces premiums for customers - £25m saved.

Gary Shaughnessy, chief executive of Zurich UK Life, reiterated the firm’s call to encourage the government to consider incentives for employers to improve take up, especially with increasing longevity.

“We believe group income protection needs to be at the heart of any UK welfare solution, which should be a partnership of public and private provision.

“Greater take up not only benefits individuals but provides considerable benefits to employers, the taxpayer and the government by relieving pressure on already stretched public funds and services.”

The insurer said rehabilitation support, a benefit provided through income protection, is often overlooked, even though it can help people back to work sooner and reduce the likelihood of further relapses.

The research also highlighted additional indirect savings that amount to around £35m, which include the cost of temporary staff to cover absence, training, recruitment and lower productivity while an employee cannot work.

This amount, however, does not include the reduced burden on the NHS from treatments being sourced privately, or the impact on families who take on extra caring responsibilities.