Corporate clients seriously overestimate the cost of group risk financial protection, meaning thousands of UK employees may be left without appropriate cover, Katharine Moxham has warned.
According to the spokesman for Group Risk Development (Grid), the majority of employers believe group risk protection will cost a significant percentage of their payroll.
In a study of 501 UK firms, with between five and 1,000 employees, Grid discovered that 70 per cent of employers thought group life assurance would cost too much to roll out to all of their staff.
Some 8 per cent of employers even thought it would set them back more than 10 per cent of their payroll.
However, the actual average cost is just 0.5 per cent of payroll, according to Ms Moxham.
The story was the same for group income protection (Gip), where typical costs are less than 1 per cent of payroll, but 60 per cent of employers thought the bill would be far higher.
Although 60 per cent of all employers accepted they had a greater role to play in protecting the health and welfare of their staff, they did not realise that providing financial resilience for staff through group risk protection products can be one of the most cost-effective ways for employers to do just this.
Ms Moxham said: "The industry recognises every business has its own needs and there are solutions to meet every budget. There is no reason why every business can’t provide some kind of group risk protection for its staff.
"Such protection policies cost less than many realise: savings can be made by not doubling up on benefits – such as paying separately for an employee assistance programme, which is already included within a group risk policy - and there’s great value to be had by using them.
"We are encouraging employers to talk to their group risk advisers to investigate the right option for them and make sure they’re getting maximum value."
She added that too many employees have overestimated how much the State would support them and their dependants in the event of ill-health or death, which is why workplace protection could "fill the gap and provide some of the most valuable benefits in real terms".
And, according to Paul Avis, marketing director for Canada Life Group Insurance, the opportunity for fee-based advisers to consult successfully on group risk schemes is "massive", due to what he described as "ongoing and historical legislative change".
For example, he cited automatic enrolment as an "ideal springboard to talk about new to market group life assurance schemes", as although 1.3m employers are eligible to buy this product there are only 42,848 registered schemes.
He commented: "If everyone has access to a pension thanks to auto-enrolment, how will employers retain and recruit the best people in the war for talent? Is group life assurance the inexpensive, simple way for an employer to differentiate themselves from their industry competitors?"
