13th November 2006
Leading disability insurer, UnumProvident, has announced the introduction of a salary-based payment option to its existing Capital Option Group Income Protection (GIP) product. The new addition is part of the company's drive to help offer businesses the widest possible choice of options.
Wojciech Dochan, Head of Commercial Marketing at UnumProvident, said:
We believe that this new development is required in view of changing work patterns and lifestyles. Together with the onset of the new Age Discrimination legislation employers need to have more affordable choices available in terms of managing the cost of sickness absence.
UnumProvident's Capital Option product was launched approximately two years ago as a radical alternative answer to long-term absence. Key features include:
- It pays income benefits for an incapacitated employee for 2, 3 or 5 years;
- It provides access to UnumProvident's vocational rehabilitation services; and,
- If the employee is unable to return to work by the time income benefits cease, the employer receives a lump sum which can be used to provide a leaving service benefit for the employee.
This means that, for example, the lump sum can be used to provide an enhanced pension for an employee who is retiring prematurely. For those employers who are feeling the strain of financing early retirement pensions within their occupational pension scheme this can be of great benefit.
The new salary-based option allows employers to link the lump sum benefit directly to an employee's salary rather than benefit payments. This option is designed to make things less complicated for employers where there is a link to pension provision.
Wojciech Dochan continues:
Since its launch, Capital Option has proven to be successful both in sales and in attracting new employers to provide income protection in the workplace. However, with increasing job mobility, paying a disability benefit to pension age is no longer a key requirement for many people. That is why limited payment options appeal to both employers and employees where otherwise no benefit would be provided.
One in five of the working population are at risk of not being able to work due to a long term illness1. And the number of people who are claiming incapacity benefit continues to rise, from less than one million in the early 1980's to over 2.3 million by the mid 1990's2. And at present it shows few signs of abating.
Overall, we want to ensure that we have a wide range of income protection options available so that we can meet both the funding budgets of employers and provide employees with cover where none existed previously.
The development follows UnumProvident's successful recent launch of its new Pay Direct GIP product.
For further information on UnumProvident's products advisers should visit: http://www.unumprovident.co.uk/Home/Advisers/Literature/
ENDS