Group Risk Insurance

Group risk insurance, increasingly, employers are including protection as part of a total remuneration package. At Hennelly Finance we have the experience and expertise to deliver a group risk insurance insurance solution tailored to each employer’s individual needs. Group risk insurance is a cost-effective way of protecting your business’ most important asset – your employees. It provides real financial benefits to both your business and its employees and helps establish your competitive edge and attract the best talent.

Group risk insurance benefits such as group life insurance (death-in-service benefit), group income protection (also known as permanent health insurance or PHI) and group critical illness are the backbone of many staff benefits packages in Ireland. They are primarily used to rehabilitate employees who are (or could be) off work on long term sickness absence due to stress, an accident or other illness. They also cover employees in the event of long-term illness or death. As a result, group risk insurance offers key advantages to both businesses and their employees.

Group Permanent Health Insurance

Group Permanent Health Insurance (PHI) pays out a regular income to the insured upon disablement and not being able to work through sickness or an accident. With the exception of a small number of exclusions, payment will be made regardless of the event (this cover is not illness-specific like Critical Illness Cover).PHI is vital in particular for the self-employed and can be used to replace up to 75% of net profits or salary (employees) in the event of ill-health. PHI is also useful as a scheme for employers. It alleviates employers of the responsibility of
continuing a salaried payment to employees who suffer from a long-term disability.

The Advantages of PHI

• The premium is fully tax relievable against income tax subject to an overall limit of 10% of income. This substantially reduces the cost to Irish tax residents.
• The provision of a substantial income which can also escalate in payment whilst
  disabled.
• Once the risk is accepted by the insurer it cannot be withdrawn, provided premiums continue to be paid.
• Income payments will continue until age 60 or 65, or earlier recovery.

Group Income Protection

Group Income Protection provides employees with a replacement income after a certain period of time in the event they cannot work as a result of an illness or injury. Statistics show that a 30-year-old person is more likely to be off work due to illness or injury for a long period than to die before they reach the age of 65. If one of your employees had to give up work due to illness or injury, how would they pay their regular bills, such as mortgage
and loan repayments, household expenses and their children’s expenses such as swimming
lessons, clothing and outings?

Many employment contracts don’t offer sick pay so providing protection for against lost income can give employees considerable peace-of-mind. Income protection insurance will pay up to 75% of an employee’s income in the event of they are off work due to illness or injury. Group income protection insurance provides a range of benefits including:

• A monthly income paid just like a salary in the event the employee cannot work due to injury or illness
• The income is paid for the duration of the illness or until the employee reaches normal pension age
• Tax deductible premiums
• The premium can be fixed or can allow for inflation, as can the benefit
• Shows your employees that you value them and their contribution to your business
  Group Income Protection is among the most valuable protection policies for employees and
  forms a vital component of your employee attraction and retention strategy.

Group Life Insurance (Death In Service)

Group Life Insurance forms the life insurance portion of an employee benefits package. It enables employers to provide a lump sum benefit and an income to an employee’s dependants in the event an employee should die prior to retirement age. Group Life Insurance shows employees they are valued in the workplace and that their
employer genuinely cares about their financial security.

Death In Service Product Features:

Cover is provided in many different forms but the most common are Group Life Insurance and Spouse’s Death In Service. Group Life Insurance offers a lump sum benefit and Spouse’s Death In Service offers a dependant’s pension. Both are based on a multiple of the employee’s salary at the date of death. Within the permissible limits of the product, the employer can choose which level of Group Life Insurance benefit to provide and to whom the benefit will apply.

In addition to a spouse’s pension, benefits may be provided for surviving children or orphans if the surviving spouse also dies. Group Life Insurance benefits can also be protected against inflation by including an escalation option. This means that any pension payable will increase over time at an agreed rate or in line with the Consumer Price Index.

Death In Service Benefits

• Competitive premium rates
• Premiums are usually allowable as a business expense and enjoy corporate tax relief thus reducing the real cost
• Wide variety of options contained in the plan means that the right plan can easily be constructed
• Generous Free Cover Limits – reducing the need for lengthy medical evidence
• Implementation of the plan enhances employee relations
  Easy administration and flexible underwriting

Death In Service Benefits for Employees

• Provides peace of mind and reassurance
• Premiums paid on an employee’s behalf are not treated as a benefit in kind, so are therefore not subject to income tax
• Any lump sum payable to dependants is not subject to Inheritance Tax
• Temporary absence cover, even up to normal retirement date

Group Critical Illness

• Group Critical Illness (CI) cover pays a lump sum to an employee diagnosed with one of a defined list of serious conditions or when undergoing a defined list of surgical procedures.
• The benefit is paid once the employee has survived for a specified period. Most insurers will also offer the option of a benefit for a covered employee who is assessed as being permanently and totally disabled but not otherwise able to claim for one of the conditions covered by the policy.
• Group Critical Illness is increasingly being provided on a purely voluntary basis as part of a flexible benefits arrangement. In this case, the premium the employee pays does not qualify for tax relief.

Na sócmhainní is luachmhara atá agat – do chuid fostaithe – a chosaint. Má theastaíonn breis eolas uait déan teagmháil linn ag 091 670123.

To find out more about group risk insurance, get in touch with our employee benefits specialists today 091 670123