Income Protection Insurance.
The Ultimate Safety Net
for Employees.
Income Protection Insurance is an employee benefit that provides a regular income to employees who cannot work due to illness or injury. It helps them maintain their financial stability while focusing on recovery.
What Income Protection Covers.
Income Protection Insurance covers a portion of an employee’s salary if they cannot work for an extended period due to a serious health condition. Policies generally cover;
Long-term conditions, chronic illnesses, or injuries that prevent employees from performing their duties.
Some policies offer additional services, such as rehabilitation programs or return-to-work support, to help employees recover and reintegrate into the workplace.
Employers typically set the coverage at 75% of the employee’s salary, which balances providing your employee with financial support and encouraging a return to work when they can.
Deferred Periods and Payment Terms.
Income protection policies include a deferred period, which is the time an employee must be off work before payments can begin. Employers most commonly select a 13-week deferred period, aligning the policy with statutory sick pay or their own company sick leave policies.
Once the deferred period has passed, the policy will become active and monthly payments will begin. These payments usually continue for a two-year term, providing a substantial window of financial support.
For employers who wish to offer enhanced protection, longer terms or coverage until retirement are also available. Your Zhoosh advisor can talk through these options with you.
Unlike many other employee benefits, income Protection Insurance is not a P11D benefit. Payments received by the employee are treated the same as taxable income, just like their regular salary. This ensures the benefit aligns seamlessly with an employee’s existing financial arrangements while minimising administrative complexity for the employer.
Income Protection Insurance isn’t generally offered as a flexible benefit unless you have 250 employees or more able to flex their cover. Its role as a core benefit reflects its importance in safeguarding employees against the financial impact of long-term illness or injury. By providing this coverage to all eligible employees, employers create a safety net that fosters loyalty to their business while providing their staff peace of mind.