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In basic terms, it’s a form of international sick pay insurance which gives employees financial support if they fall ill – or become injured – and are unable to work. The key difference with the International policy is that it supports your workforce all over the world.
International Group Income Protection is a benefit growing in popularity for the support it provides employees based in overseas offices and the peace of mind it offers expatriate staff.
International Income Protection is provided via a choice of two products:
Both products are usually used by businesses with staff in multiple locations who want to centralise and harmonise their international employee benefits, and for expatriate staff on assignment around the world.
International Group Income Protection is also commonly referred to as International Business Income Protection, International Company Sick Pay and other variations of.
Unlike other insurance schemes, International Group Income Protection rarely comes with a detailed list of included/excluded conditions from the insurance provider. Instead, it offers coverage on the simple basis that an employee is deemed no longer physically or mentally eligible to carry out the functions of their job.
It is up to the employer’s discretion how much of the employee’s salary is covered under International Income Protection, though most insurance policies set a maximum payout limit of 80% of the employee’s wage.
The company will also need to select an initial deferred period, typically either 13 or 25 weeks (3 or 6 months), after which International Short-term Disability would kick in to cover a chosen percentage of the employee’s salary each month. In other words, they will not receive income support until that time.
Keep in mind, that a company is already obliged to pay the employee Statutory Sick Pay (SSP) for up to 28 weeks.
These are some of the stipulations you can expect to see:
Note: If the employee is declared fit to work part time only, they can receive a partial payment to support them. It effectively tops-up their earnings. This is usually reviewed after three months.
The International Short-Term Disability benefit will stop when either:
If an employee returns to work but subsequently relapses, then the payment will resume as before without any additional deferment period, providing that the return to work lasts less than 60 days and that the cause for the new disability/illness is the same condition which previously occurred.
The details of cover are very much the same as for short-term disability. One key difference is the requirement that, after two years – when long-term disability kicks – the employee needs to satisfy two key points:
There are many reasons that businesses choose International Employee Income Protection as a benefit for their staff.
Employees regularly rate it as one of the most desired employee benefits due to the security it provides both them and their families. Since the Covid pandemic, business income protection has been ranked in the top three most popular benefits for employees on numerous surveys, due to the increasing awareness of the need for financial security in the event of a long-term illness or accident.
However, what is often missed is that International Business Income Protection is as much an employer benefit, as it is an employee one. Some of the reasons why employers rate it so highly include:
There are several factors that come into account when determining the cost of International Income Protection policies. For example:
In order to get a free quote tailored to your business contact us on +44 (0)1273 974419 or visit our quotes page.
HMRC doesn’t treat Group Income Protection policies as a P11D benefit. Monthly premiums, however, qualify as an allowable business expense and so are tax-deductible.
Policies offer full-term of short-term payout options.
You can make multiple claims on each option.
Once your employee meets the pre-requisites of the insurance, the coverage will then start from the entry date. The entry date can be found on both the quote and the policy.
Generally, not, but do check with your policy provider. However, they usually require an employee’s medical history and/or will be required to fill-in a questionnaire.
They are one and the same. The only difference is the terminology used. International Business Income Protection is split into two products:
However, they both do the same thing – providing financial security for employees and employers when a member of staff has an accident or illness and is unable to perform their job.
The only difference between them is how long after the unfortunate event that the payout kicks in. The short-term version can be deferred up to two years after the event, but the long-term product comes into play after two years. See secton ‘What is International Group Income Protection’ for more information.
As a business purchasing the insurance for your employees, you can choose how much of the salary you are looking to cover. This can range from 50% to 80% although 60 – 80% is more common.
The amount of salary that you cover impacts the premium that you pay.
Again, the employer sets this limit, generally between 50% and 80%. If short-term disability is also in place, then the business will decide whether to maintain the same level of protection, or alter it.
There are no set qualifying events or a list of illnesses that need to be met for the insurance to kick in, solely that the employee has been declared unfit to perform the duties of their job, and that the minimum criteria for a claim as been met, as per the above points.
As per the above answer for short term disability, there is no set qualifying event or list of illnesses to be met, however the minimum claim criteria will need to be satisfied, as outlined above.
There is no minimum time off. However, for a claim to start being paid, the employee would need to be unable to do their job for longer than the deferred period (the point at which the policy is due to start paying out) that has been set on the plan.
International Long-Term Disability would only start after either 2 years, or the end of the International Short-Term Disability coverage, if it had been taken.
International Short-Term Disability covers the employee or expatriate team member for up to two years after the chosen deferred period.
International Long-Term Disability can provide a percentage of an employee’s or expat employee’s wage right up to the age of 65, should they be unable to return to work due to the illness or injury suffered.
This is down to the discretion of the employer, not the policy. Most employers will still fund other benefits for the short term, particularly if they are using benefits like International Health Insurance or an International Employee Assistance Programme to aid their recovery.
In the long term, employers may reduce or stop funding these benefits if they are not actively employed and if it does not breach contract of employment.
The affected employee may wish to use their sick pay in order to invest in these benefits personally – most International Health Insurance providers will offer what is called a ‘continuation option’. This allows the employee to transfer from the company scheme to a personal scheme on a similar level of cover, or less, without any additional underwriting to maintain the coverage you received on the company scheme.
Employees and expats can apply for new jobs while receiving International Business Income Protection.
However, should they accept an offer and start a new job it would affect them receiving their monthly pay outs.
The precise impact depends on the work, remuneration, whether they were receiving short or long-term disability, and the rules and processes of the particular insurer.
The employee would be advised to seek out professional guidance and speak to the insurer paying disability insurance before actively looking for a new job to ensure they are not left in a worse position.