Employers are massively overestimating the cost of Group Income Protection – and not protecting their employees
Employers overestimate the cost of Group Income Protection schemes by nearly 140%, according to new research from Legal & General – as they expect the average cost to be 3.54% of payroll. In fact, a scheme would typically cost around 1.5% of payroll.
The misconception around price is even worse among employees, with many believing GIP schemes are three times more expensive than they actually are (estimating 4.74% of payroll).
The research has shown that the myths surrounding the costs of group risk products have proved off-putting to employers, with less than one in ten (8%) providing income protection currently.
Despite this, employees feel that it is important for their companies to provide GIP, and over four in five (85%) would like their employers to provide it.
MartinuNoone, managing director, Legal & General Workplace Health and Protection, said: “Our research highlights the common misconceptions around the cost of Group Income Protection schemes among employers and employees, and it is the responsibility of both provider and adviser to inform businesses of the many benefits and relative value for money of the schemes. Group Income Protection can play a crucial role in helping employees return to work as quickly as possible following an illness or injury and in turn reduce the cost of absence for employers.”