Strategic wellbeing | How income protection can benefit your business and your employees

How income protection can benefit your business and your employees

If a cloud as dark as the pandemic can be attributed a silver lining, then it is surely the appreciation of the value of good health; maintaining it wherever possible; restoring it quickly – while removing any added financial pressures – when lost; or managing it to support work- and life-ability where long-term.

We’ve never been so aware of our vulnerability to health issues and of the limitations of the NHS in dealing with them.

Recent Legal & General research shows three quarters (75%) of employees with access to income protection via the workplace feel it is either ‘fairly’ or ‘very’ relevant to theirs and their family’s health, wealth and happiness.1

Despite shrinking workforces and the desires for struggling employers to cut costs, the numbers covered by group income protection industrywide actually increased by 6.6% during 2020 -- compared to only 1.6% in 2019.2

Providers have certainly made their mark by paying claims quickly and ensuring that employers have received support like premium flexibility, especially around furloughed workers.

The introduction of next generation, mobile first, delivery mechanisms for protection products, putting control over the sum assured firmly in the hands of individuals (as opposed to the company dictating blanket levels), is also helping to move the industry forward and supporting the diversity, inclusion and overall strategic wellbeing goals of companies of all sizes.

Adding value

But it’s not just the core insurance mechanism that appeals. The peace of mind that comes from receiving a regular income, including covering workplace pension contributions, if individuals are unable to work due to sickness or disability, is as important as ever. But the product is now becoming valued just as much for its added-value features.

These commonly include everyday physical and psychological support services such as employee assistance programmes (EAPs) and second medical opinion services.

Furthermore, the added-value features are still available even to companies that take out low-cost versions of income protection that only pay out for two to five years – as opposed to until retirement.

Support for HR is also a feature. For example, management consultations via the EAP, plus stress risk assessment support from the Vocational Rehabilitation teams within certain providers.

So, for a minimal outlay, even small to mid-size companies can effectively provide themselves with a mini occupational health department, and one that is up-to-speed with the looming new threat of Long Covid, as well as pandemic related situational anxiety; namely Coronaphobia and Post Pandemic Stress Disorder.

The calm before the storm

It could well be that we have yet to feel the true extent of the health backlash from the last 18 months because the delays in diagnosis and treatment it caused may mean that many conditions that could have been nipped in the bud deteriorate into long-term absenteeism problems.

Plus, the issue of work-related stress and burnout was already rising pre-pandemic, with 17.9 million working days in Great Britain lost due to work-related stress, depression or anxiety in 2019/20.3

And, right now, there seems no ceiling in sight; who doesn’t know someone who complains that lockdown has badly affected their mental wellbeing?

It’s also unlikely that furloughed workers with anxieties – financial or otherwise – are likely to raise a hand for fear it might weaken their position in a redundancy exercise. Things are only likely to get worse as restrictions ease.

A lot of organisations have allowed employees to roll over annual leave, and their absences could prove the straw that broke the camel’s back for colleagues faced with unmanageable workloads.

Returning to work

Against this backdrop, the rehabilitation expertise offered by income protection insurers should become more valued than ever.

One advantage of the trend towards hybrid working is that employees with disabilities and newly disclosed health conditions may have more opportunities to work than ever before. But how many employers are equipped to provide the support required without third party help? Again, income protection can help.

Broader HR strategy

As well as providing HR with the support needed to look under the bonnet of organisations and identify the risk – in terms of stress risk assessments – income protection can also help nurture a culture of support. Some providers now incorporate HR communication toolkits into their offering to help organisations better communicate income protection and its associated everyday support services as part of wider wellbeing strategy; bolstering wellbeing for all via customised communication.

The communications angle is certainly one that that doesn’t receive enough attention as employers won’t maximise return on their investment in income protection unless employees are fully aware of its benefits.

The requirement since April 2020 for employers to give all employees and workers
from day one a written statement of employment particulars - that includes details of sick pay and incapacity terms – is also worth bearing in mind.

It represents the perfect opportunity to kick-off the culture of wellbeing conversation from the outset. After all, this is what new recruits were looking for pre pandemic; nearly 9 in 10 (88.7%) of graduates said they would be more likely to apply to an organisation that is open about its commitment to supporting the mental health of its employees.4

And, with a new and heightened awareness of the value of good health at all ages, this will undoubtedly represent the thing that separates the wheat from the chaff in the pandemic economy and beyond.

Take a look at how our Income protection product can support you and your business

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1 Legal & General commissioned Opinium to carry out this research, involving 1,087 UK employees who have access to either IP, CIC or EAP. Dec 2020.
2 Swiss Re’s Group Watch 2021
3 Labour Force Survey/HSE statistics November 2020,
4 Legal & General commissioned Delineate to carry out this research, involving 1,009 students attending or who have attended a Russell Group University. Sept and Oct, 2019.

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