The Association of British Insurers (ABI) has called on the government to introduce a tax incentive for employers purchasing group income protection (GIP).
ABI analysis showed a tax incentive, as part of a larger package of measures, could mean coverage increases from its current levels at 7 per cent to reach 12 per cent after five years.
According to Landman Economics modelling, this increased coverage could also save the Exchequer more than £220m over five years.
Responding to the government’s green paper on work, health and disability, the ABI stated its proposed package of measures would increase financial resilience for individuals, households, business and society.
The ABI also called for the government to encourage employers to issue an annual ‘protection statement’ to their employees in order to make them aware of their combined sick pay and benefit entitlement in the event of an absence from work due to health reasons.
ABI assistant director and head of health and protection, Raluca Boroianu-Omura, said: “Households in the UK are among the most financially exposed in the developed world.
“Serious illness and death often lay bare the fragility of households in the face of economic shocks. Our suggested measures are a win-win, with more consumers being protected while saving the government money.
“If implemented, the ABI’s proposals for change set out in the response to Improving Lives: The Work, Health and Disability Green Paper could help to provide security and peace of mind to millions more households in the UK, bringing a whole range of social and economic benefits.”
emma.hughes@ft.com
