Income protection Employee benefits

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Your employer is legally required to give you sick pay

If you are employed, the most your employer has to pay you by law is Statutory Sick Pay (SSP) of £75.40 a week (during 2008-2009). However, many employers are more generous than this and often employers' sick-pay schemes give full pay for a set time (four weeks is fairly typical). Some employers go on paying at a lower rate, such as half pay, after the initial sick pay period ends.

Once the sick leave period has ended, employers have a number of options:

  • They can stop paying sick pay altogether so the employee goes on to benefit
  • They can agree to extend the period of sick pay
  • They can offer alternative work or early retirement
  • Terminate the employee's contract.

Some employers go further than just offering a sick-pay scheme and have a group income protection policy which starts to pay out when sick pay stops. For example, the employer might cover sick pay for the first eight weeks, and then the insurance policy kicks in if the employee is still unable to return to work after that time.

A group income is a valuable employee benefit. It provides the employee with income protection without paying premiums or for a very small cost - a fraction of what an equivalent individual policy would cost.

Make sure you know what you're entitled to from your employer and the state before you buy any extra protection insurance, otherwise you might end up over-insuring yourself.

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