Aviva has confirmed that its group income protection clients will be covered for the rise in National Insurance Contributions (NIC) as well as the upcoming Health & Social Care Levy.
Aviva will assist companies that provide NI coverage as part of their group income protection programmes in adjusting to the rise in NI Contributions (NIC) that will take effect on the 6th April 2022.
The government announced that NIC will rise by 1.25 percentage points from 6th April 2022. The NIC will revert to the current rate on 6th April 2023 and a new Health and Social Care Levy of 1.25 per cent will be implemented.
The rise in NIC, as well as the new Health and Social Care Levy, will be insured by Aviva. Existing group income protection policies that cover NICs will be affected by the change, as will new group income protection policies that start on 6th April 2022, and cover NICs, according to Aviva.
Aviva says the unit rate will stay the same and that the majority of the group income protection plans that it insures use a unit rate based on total salary roll, and the premium for these products will not change.
A unit rate based on the total benefit is used in some of the group income protection products Aviva insures. Premiums for these plans will rise as a result of the increased NICs, which will result in a greater insured benefit. The increased NICs or the new Health & Social Care Levy will be factored into the unit rate given at the next rate review.
The NICs calculated at the time of incapacity are covered by Aviva. As a result, Aviva says that the benefit payable for claims in payment and claims with an incapacity date before 6th April 2022, will remain unchanged.
Aviva says that if the date of incapacity is on or after 6th April 2022, the benefit will take into account the increased NICs or the new Health & Social Care Levy.
Aviva sales director group protection Jason Ellis says: “By covering the increase in NICs and the levy announced by the government to pay for health and social care funding, we hope to provide reassurance and certainty to our Group Income Protection clients who insure National Insurance Contributions, as the changes come into effect.”
