What is it?
Employee benefits are part of the overall remuneration package offered to staff by employers. There are 4 main areas of benefits, death in service, critical illness, permanent health insurance and private medical insurance.
Group Death in Service
Death in Service (DiS), as the name suggests, is life insurance cover. There is a common misconception that to claim Death in Service, the employee must pass away during working hours. This is not the case. The only requirement is that the individual was still employed by the organisation at the date of death.
The death benefit is typically based on multiples of salary; 2 to 4 times basic salary being the most common. The benefits can vary according to seniority within the organisation.
Group Critical Illness
Critical Illness (CI) is similar to Death in Service in that the pay-out is based on multiples of salary. Again, this can vary according to the employee’s position within the business. Where it differs from Death in Service is that this benefit pays out on specified conditions and illnesses. Typically, a basic policy will cover 22 major illnesses such as stroke, heart attack, brain tumour and invasive forms of cancer. It is possible to get a more comprehensive cover which will include further illnesses.
Group Permanent Health Insurance
Permanent Health Insurance (PHI) pays an income to the company so that they can continue to pay an employee when they are absent through illness. Typically, the amount is expressed as a percentage of basic salary. It is the employer’s decision how long this benefit is paid; it could be 2 years or up to a set age such as retirement. An employer can set a deferred period which could for example begin after company sick pay has ended. Unlike Critical Illness, this insurance does not have to be for a specified illness, it is instead related to the medical capability of the employee to recommence work.
Group Private Medical Insurance
Group Private Medical Insurance (PMI) allows the employee access to private hospitals, avoiding NHS waiting lists. This insurance reduces undue suffering and the potential time absent from work. Private Medical Insurance is available with different levels of cover from basic plans through to comprehensive cover. There is also the option to add extras, such as dental cover.
Advantages of employee benefits
Employee benefits help to attract the right calibre of staff. They are also a vehicle for an employer to show their caring nature to the workforce. Some benefits can help prevent staff being absent from work through illness or help to reduce the length of time an employee takes to recover. By default, this helps the employer too. A happy, healthy workforce increases profitability.
We can help guide you through the array of employee benefits options available, picking the best solution for your individual business and its workforce. Contact us today for an informal chat.
