Zurich Flexible Group Income Protection Cover
Zurich’s new flexible group income protection (GIP) plan is aimed at larger organisations – those with at least 250 employees. Key features of the new plan include:
Each employee gets a basic core level of cover. They can then increase that to meet their needs and budget.
The minimum insured benefit is usually 25% of salary.
The maximum insured benefit is the lower of 80% of salary or £350,000.
There is a choice of benefit payment periods of 2, 3, 4 or 5 years or to policy terminating age.
Employees can change their benefits at an annual window or following a lifestyle event to tailor their cover to their changing circumstances.
Employees aged 16-69 can be covered.
An initial rate guarantee period applies and this is usually two years.
Comment: Flex or flexible benefits schemes allow employers to offer a much wider employee benefits packages than they otherwise might. In doing so, they can still determine what benefits employees should have, while also allowing them to tailor benefits to what they actually need and can afford. Employees too can choose only as much cover as they want, and can go on to change that as their circumstances and budgets change.
One criticism we do have is that some of the literature is not really very customer-friendly or at least could be significantly improved. For example, the literature sets out the basics of the cover but there is little mention of some of the extra benefits individual customers now expect. Actually, group risk insurers (including Zurich, which has a good reputation for claims generally) do provide more than just financial help. Zurich also produces a guide for employees outlining its rehabilitation and return to work advice process when a claim is made but again, the language used in that is a bit formal and comes across as too insurer-focused.
But those are minor criticisms. Overall, the plan is a straightforward GIP proposition. Employers will choose it (or advisers recommend it) if cost, flexibility and service meet what they are looking for.
Plus points: This is straightforward group income protection cover – easy to understand and buy; Designed to fit with a flexible benefits package; Zurich is a blue chip insurer, which can be especially important to some employers.
Not so plus points: The UK has less than 7,000 businesses with 250+ employees and, as some of those do not have flexible benefits schemes, the actual market is quite small; Some of the language used in the employee claim guide is too insurer focused and is not very customer-friendly; Many employees will have to pay extra to get the level of cover they want or need.
Website: http://www.zurich.co.uk.
Rating (max 10): Innovation: 8. Overall: 8. Gold
Tags: IP; Zurich.