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Group Income Protection

Employers use group income protection as part of their absence/attendance programmes.

What is Group Income Protection?

Group income protection is a policy taken out by an employer to cover a promise to provide sick pay to employees if illness or injury prevents them from working for a prolonged period.

Group income protection providers support employees to help them return to work with reasonable adjustments made by their employer but if the employee cannot work due to illness or injury the policy will pay a benefit of a proportion of their salary.

The benefit is paid to the employer and then passed on to the employee through the PAYE system. Generally, premiums paid by an employer can be offset against corporation tax and are not regarded as a benefit in kind.

Some facts and figures

The group risk market insures 2.775 million people for annual income protection benefits totalling over £100 billion – Swiss Re Group Watch 2021.

The group risk industry paid out £551 million in income protection benefits to a total of 15,837 people during 2020 – GRiD 2021 Claims Survey.

The average new claim paid in 2020 was £28,138 pa and the main causes for claim were cancer (28%) and mental illness (22%) – GRiD 2021 Claims Survey.

2,362 people (31.8% of all claims submitted) were helped back to work in 2020 before they reached the point of making a claim – GRiD 2021 Claims Survey.

A group income protection policy will often include some extra support services designed to help employers and employees alike on a daily basis – even if a claim is never made.

In total, there were 138,222 interactions during 2020 with the additional help and support services that are funded by group risk insurers, giving daily value to employers regardless of whether or not a claim was made under their policy – GRiD 2021 Claims Survey.

Expert advice should always be taken when setting up or reviewing a group risk insurance scheme to ensure that optimum cover is provided, any extra support services offered alongside the policy are used and all tax efficiencies are maximised.

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group risk

Group Life Assurance

Group Life Assurance

Provides a benefit on an employee’s death

Represents 40% of all insured life cover in the UK

Tax free lump sum up to Lifetime Allowance

Taxable dependants’ pension

Benefits over Lifetime Allowance through “excepted” route

Group Critical Illness

Group Critical Illness

Pays a tax free lump sum to employee on diagnosis of one of a defined list of serious medical conditions or on undergoing one of a defined list of surgical procedures

Can be extended to dependants

Increasingly popular under flexible benefits arrangements

Fastest growing group risk benefit

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If you are active in the group risk market and would be interested in gaining a greater share of voice and working more closely with your contemporaries in the industry please get in touch by completing this page.

Benefits of membership:



The opportunity to influence group risk policymaking.



GRiD is a respected voice in the protection sector – as such, membership enhances the status of member organisations.



Privileged access to output from the various working groups, including consultation responses, regulatory updates, employer research and pan industry claims data. GRiD members also gain exclusive access to industry speakers at member meetings.

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