The industry body – Group Risk Development (Grid) – found that only 27 per cent of employers surveyed identified the correct definition of a GCI as “a policy taken out by an employer to provide a tax-free lump sum to an employee on the diagnosis of one of a defined list of serious conditions or on undergoing one of a defined list of surgical procedures”.
The study found some employers thought a GCI policy paid out a regular income, rather than a lump sum. Others thought it was simply to cover expenses accrued as a result of this illness.
Worryingly, a minority thought that the policy made a payout to the employer rather than the employee.
In fact, a claim can be initiated once the employee has survived a critical illness included under the policy for a specific period of time (typically 14 days) and the employee has complete freedom about how they use the pay-out.
Grid points out that with increasing numbers of people surviving a critical illness, these policies have a more important role to play in the workplace.
However, their research also shows that employers don’t currently think it’s as important to their employees as the other group risk benefits, with 38 per cent seeing group income protection as the most important of the three, 29 per cent seeing life assurance as the most important and only 20 per cent seeing critical illness as the most important.
According to Grid statistics that average payout on a GCI policy is £71,463. This money can be used to support an employee in a number of ways, from paying of debt, covering everyday living expenses, supplement sick pay or to give them the financial freedom to take a break from work and re-evaulate their priorities
Grid says these policies also offer advantages for employers. GCI policies provide support services to help people return to work. It points out group risk policies can help increase engagement across a workforce, not just from those who claim on these policies.
According to Grid’s research, the most popular reason for offering GCI is to ‘look after staff and their families’. A financial pay-out is an obvious benefit but GCI can also offers practical and emotional support through an Employee Assistance Programme, a second medical opinion service, personalised cancer support, nurse-led support, a treatment-sourcing service and more.
Grid spokesperson Katharine Moxham says: “Being diagnosed with a critical illness is extremely traumatic, and a pay-out can buy both valuable time and freedom for the individual employee and their family whilst they come to terms with their new normal.
“Where no protection is in place, employees could face the additional burden of financial stress which is hugely unsettling in itself, but it may also be unhelpful in recovering from a medical condition or getting over surgery.”
She adds: ““Each group risk benefit offers something quite different in its own right. Group Life offers peace of mind to employees that their household will be supported financially in the event of their death, Group Income Protection provides continued pay for employees who are unable to work for any length of time due to illness, injury or disability and Group Critical Illness supports people with a lump sum payment at a time when they have received the news of a devastating diagnosis. All offer quite distinct benefits, but also work well together.”
