The survey has shed light on both the current challenges and the way forward for the group income protection industry.
- Only 15% of employers surveyed offer GIP, the least commonly provided group risk benefit
- Just 9% of employees said they would value income protection
- Yet vocational rehabilitation is the most attractive added value group risk benefit
- Perception of high costs and lack of awareness main reasons employers don’t buy
The survey of 1,150 employees and 1,001 employers in the UK, conducted by group risk insurer Ellipse in August of this year, has shed light on both the current income protection challenges and the way forward for the industry.
Asking employers what benefits they provide, only 15% said they provide income protection. More provide private medical insurance (28%), life insurance (26%) and even gym memberships (23%). With a workplace pension the most commonly provided (77%).
The research also explored the benefits employees would value most, with only 9% of employees scoring income protection in their top three benefits. When employers were asked what they thought their employees would value the most, only 11% said income protection.
Not engaging enough with employers to educate and inform them as to the cost and value of the cover is one of the biggest income protection challenges.
Exploring the reasons for not providing any group risk insurance, 32% of employer respondents said they thought the cover was too expensive. Although they hadn’t actually checked and 20% said they did not know enough about the product. Reassuringly only 12% said they didn’t think there was any value in providing group risk benefits.
Ellipse Chief Marketing Officer, Chris Morgan said, “This research paints a challenging picture for our industry. We simply haven’t engaged enough with employers to educate and inform as to the cost and value of income protection. Negative perceptions are a real barrier but we can overcome these. The product also has an image problem amongst employees. It is valuable cover yet most just don’t know what it is. This is a challenge for all insurers and advisers to address.”
The research also explored the most valued additional services provided by group risk products. For both employers and employees vocational rehabilitation and back to work support was the most popular. 37% of employers and 31% of employees said they would value it.
Morgan added, “Emphasising the more immediate and preventative benefits provided by group income protection is another tactic which our research suggests may help to improve its image. Presented with a two or three year limited payment period, a low cost entry level product which adds everyday value can easily be created. Surely some cover is better than none?”
Click here to read the full research report.
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