Why Group Critical Illness?
Critical Illness Cover pays a lump sum benefit should a member of staff suffer a serious illness.
The most common conditions which are covered include cancer, heart attack and stroke.
Additional benefits often include an Employee Assistance Program and Best Doctors Service.
21% of people have suffered long term ill health during their working life. Met Life 2012
What does Group Critical Illness cover?
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…
4. Multiple Sclerosis
2. Heart Attack
5. Motor Neurones Disease
6. Parkinson’s Disease
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 covered in the policy.
The business assists the employee in making a claim with the insurer.
The insurer pays the sum assured to the business as the policy owner.
The business then pays the funds to the employee (tax-free).
Your Key Policy Options
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’.
Being Independent Insurance Advisers we pride ourselves on being the experts, knowing every insurance product we offer inside out and back to front. Here’s how we work –
The Fact Find:
We will talk you through the options available and capture vital information about the employees to be covered.
We go out to all leading group insurers to gain the most competitive premiums.
We email you a short report with pricing and insurer recommendations for the various options we’ve discussed. When you are happy to go ahead in many cases we are able to complete the application for you over the phone.
Victoria had excellent on the spot knowledge and vast experience in my line of work. Even where she didn't know, she was able and willing to promptly clarify with colleagues and insurers.Risheka Walls
What is group critical illness insurance?
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.
Do we need critical illness cover?
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.
Group policy options
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.
Including total permanent disability
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.
To provide expert financial advice and deliver a passionate 5-star service to help educate our clients so they can make informed decisions.
To help individuals and businesses throughout the UK to plan their financial future whilst protecting them against the financial risks they may face.
To provide quality financial advice in a transparent, friendly and professional manner.