Limited income protection (IP) designs could be just as effective as comprehensive policies, if empl...
Limited income protection (IP) designs could be just as effective as comprehensive policies, if employers were more proactive in getting involved earlier on in the claims management process, according to Watson Wyatt.
Jamie Winter, healthcare and risk consultant at Watson Wyatt, said, if companies are to finance long-term sick pay arrangements, it is crucial that they handle the employee health management programmes correctly from the start. One way firms can ensure involvement in the claims manage-ment process by focusing on the rehabilitation process.
Winter suggested that by adopting this method, traditional IP, which would usually provide someone with an income up until retirement, may no longer need to be provided by employers wishing to offer a permanent income for employees. He added that a limited term IP design or a limited term IP period could, for example, offer employers exactly the solution to ill health management they need, while still remaining affordable.
"Under such designs, employees remain on the payroll for a maximum period of two, three, or five years, during which all the options for rehabilitation into work are explored. At the end of this period, when statistically a return to work is unlikely, the option to terminate service then exists," he said.
Commenting, Helen Merfield, managing director at HCML, said: "A policy that stops paying out after a few years could provide an incentive for someone to get back to work.
