Group Critical Illness Insurance
Protecting your company's most important asset...
What does Group
Critical illness insurance pays out a lump-sum provided an employee suffers a critical illness condition that is specified in the policy terms. Most group schemes cover around 12 core critical illness conditions.
Commonly covered critical illnesses.
Although cancer, heart attack and stroke represent the causes for up to 80% of claims, it is possible to add cover for around an additional 20 conditions with some insurers.
How does Group Critical Illness work?
An employee suffers a critical illness condition
The business assists the employee in making a
The insurer pays the sum assured to the
The business then pays the funds to
Level of cover
The level of cover is usually set as a multiple of basic salary before tax, although fluctuating emoluments can be covered with some insurers.
Tip: It is common for the level of cover to range from one to two times basic salary, on average, although some organisations do provide higher levels of cover.
Length of cover
Although group schemes are reviewable annually the plan can payout at any point up to a certain age, which is usually set in line with the company's retirement age.
Tip: It was common for schemes to run until age 65 but with the removal of the fixed state pensionable age plans should now run until 'age 65 or State Pensionable Age'.
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The Fact Find:
Group Critical Illness has become more and more important since its introduction. We all know the statistics surrounding cancer and other life threatening illness such as heart attack or stroke. Any such event can be life changing both in an individual's personal and working life.
Critical illness cover provides a tax free lump sum should an employee be diagnosed with any of the critical illnesses listed in the policy terms. The most common conditions covered include cancer stroke and heart attack.
With the right support, many people diagnosed with a serious illness are able to make a full recovery and return to work. During difficult times the last thing an individual wants to worry about are their financial obligations and as such a great way to support your employees is with a lump sum payment which they can use as they wish.
This simplest way of providing this financial support is through a critical illness policy, it minimises the pressure around how to provide financial support for those employees absent from work after suffering a critical illness.
The lump can be used to cover the costs of the best medical treatment or make alterations to their living arrangements should they require. Many policies have the added benefit of providing an assistance program providing support to the employee during their recovery and their return to work when possible.
There are a range of factors which affect your premiums some relating specifically to your organisation others relating to the level of cover we will discuss both in further detail below.
Level of cover
The level of cover is often designed as a multiple of salary. On most policies the maximum benefit is set at 4 x salary to a maximum benefit of £500,000.
The greater the level of cover you provide your employees the more expensive the premiums, in addition to this the greater the sum assured the more likely an employee is to require manual underwriting.
Range of Employees Covered
The policy can be set up to cover certain groups of employees; cover could be set by a grading structure or position within your organisation.
Whatever you choose the premiums will be based on the group risk, the higher the salaries and the older the age of your population covered the more expensive the premiums will be per head.
Range of illnesses covered
A basic illness list is likely to cover a dozen of the most competitive critical illnesses; the comprehensive plan will add an additional 20 or so conditions to the policy terms. The greater the level of cover you require the higher the risk of a claim occurring and thus the greater your premiums.
Total permanent disability is often an additional option on a plan and does not cover an illness per se but covers an employee should they be unable to work in their own occupation should they be made totally and permanently disabled for any reason.
If you are reviewing an existing scheme or looking to introduce a new group critical illness insurance arrangement then we are in a great position to help you.
With our knowledge of the insurance industry and your understanding of your organisation and employees, together we can implement the most appropriate cover and ensure the most competitive premium rates from the insurers.
If you are looking to cover less than 3 employees you may well need to consider personal critical illness cover for each employee.
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