Industry Insider: Renee Coffey
Hi Renee, how long have you been working with Group Income Protection policies?
Since starting with Coverforce 10 years ago now, I've always worked with Group Income Protection policies in some capacity; from policy administration, to processing claims and payments, to visiting with employers and providing employee presentations, and now as National Manager of Employee Benefits, I am responsible for all our Group Income Protection clients accross Australia.
Fantastic, then I'm talking to the right person. So, what exactly is Group Income Protection?
Firstly, I'd like to note that Group Income Protection can be called quite a few different names including; Personal Accident Cover, Group Risk Insurance, Group Salary Continuance and quite a number of others. Generally, all these policies can be written as a group and will provide similar income protection benefits.
Group Income Protection is insurance that is taken out by a corporation on behalf of it's employees. The policy will protect the employees income in the event of total or partial disability caused by accidental injury or sickness, 24 hours a day and 7 days per week. The employees are the benefiticaries of these policies.
In a similar way to insuring your car or house, an income protection policy insures your future earning capacity.
So if I was covered by this policy and I got injured on a skiing holiday in Switzerland my income would be protected?
Absolutely. Some policies will have territorial limits but ours do not, you are covered for accidental injuries and sickness 24 hours per day, 7 days per week, any where in the world.
Wait a minute, isn't much of this already covered by Workers Compensation in Australia?
Not really, Workers Compensation will not cover you for non work related sickness, nor will it cover you for accidental injuries that happen outside of the workplace.
Unfortunately, even if you have a work related sickness or an accidental injury that does happen at work you will only be covered for the legislated amount in your state. You cannot choose your rate of cover.
For example; should you have an accident at work in NSW, you will get paid at the current weekly wage for your profession for 26 weeks, then at the statutory rate thereafter until you return to work. Currently the statutory rate is around $409.10 per week*.
Considering many employees are earn well above the current weekly wage and that there is generally no compensation for lost overtime, bonuses or other income, right off the bat it would be quite difficult to meet regular rental or mortgage repayments and other financial commitments. And after 26 weeks, once you get to the statutory rate of $409.10 per week* it would again become much more difficult for you and your family financially.
* The statutory rate is provided under Section 37 of the Workers Compensation Act 1987, the rate of $409.10 is applicable from 01/10/2010 to 31/03/2011)
Put simply, an income protection policy protects and employee's real earning capacity and allows them to maintain their standard of living during a time when they really need to be worrying about their health, not their bank balance.
That's really confronting. If your employer is not prepared to take out a policy like this, can empoyees take out a similar policy themselves?
Yes and no. Employees can take out individual income protection policies, however as they are not a part of a group, their standalone policy will be much less affordable and will generally provide less benefits.
The power of purchasing as a group means the insurer will charge a greatly reduced premium per person for a very high quality policy. Plus generous policy features can also be negotiated and included at very minimal additional charge and in some cases no additional charge.
Some examples of non-traditional benefits that can be intergrated into Group Income Protection policies include:
- Rehabilitation and return to work assistance
- Loss of life benefits
- Funeral benefits
- Bill payment assistance (should an employee become redundant the insurer can assist with bill payments for up to three months)
- Workers Compensation Top Up (Payment of the difference between your workers compensation payments and your actual wage)
- Homemaker assistance
- Reduced waiting periods and increased coverage limits
So, do you feel that Group Income Protection Insurance is an Employee Benefit worth providing to employees?
Absolutely, many groups of employees will actually negotiate with employers to provide this insurance, as it offers employees real protection for themselves and their families should the need arise.
When we set up a Group Income Protection Policy for an employer we are available to go out to their place of work and deliver a presentation to all their employees so they understand what this really means for them.
Also, it can be a real point of difference for employers in fields with skills shortages as it holds a lot of value for every employee, from single income families, to those with large financial commitments.
Excellent, where can employers find out more information about Group Income Protection Insurance?
They can contact myself (Renee Coffey), or Jim Angelis at Coverforce on 02 8814 4700.
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