GRID: Employers lack understanding of group critical illness

Just over a quarter of employers (27%) surveyed by group risk trade body GRiD were able to identify group critical illness as ‘a policy taken out by an employer to provide a tax-free lump sum to an employee on the diagnosis of one of a defined list of serious conditions or on undergoing one of a defined list of surgical procedures'.

Some employers incorrectly believe group CI will pay an income rather than a lump sum to employees with a serious illness, or simply to cover expenses as a result of the illness. Others thought that the policy paid out to the employer instead of the employee.

The truth is that a claim can be initiated once the employee has survived a critical illness included under the policy (typically after 14 days) and the employee can use the pay-out how they see fit.

According to GRiD's most recent stats, the average claim is £71,463 and the money can be used to support an employee in many ways, such as to adapt their home, pay for treatments or to supplement sick pay and spend on everyday living expenses.

Extra services are also often included with a policy. These can include emotional and practical support as well as access to an employee assistance programme (EAP), a second medical opinion service, cancer support and help from nurses.

Survivors

According to cancer research, one in two people in the UK will develop cancer during their life time, with the number of people living with it is set to double from more than two million to 2010 to four million by 2030, as an increasing number of people survive treatment.

Around seven million people are currently living with heart and circulatory disease in the UK and an estimated 915,000 people alive today have survived a heart attack, while there are more than 1.2 million stroke survivors in the UK and almost two thirds have a disability.

The Money Advice Service found that 12.4 million people in the UK would have to borrow or could not pay when faced with an unexpected £300 bill and 64% of adults do not have savings equivalent to three months' income or more.

‘Traumatic'

Katharine Moxham, spokesperson for GRiD said: "Being diagnosed with a critical illness is extremely traumatic, and a pay-out can buy both valuable time and freedom for the individual employee and their family whilst they come to terms with their new normal. Where no protection is in place, employees could face the additional burden of financial stress which is hugely unsettling in itself, but it may also be unhelpful in recovering from a medical condition or getting over surgery."

The research also found that employers do not think group CI is as important to their employees as other group risk benefits, with 38% seeing group income protection as the most important, 29% picking life assurance and 20% recognising the value of critical illness.

"Each group risk benefit offers something quite different in its own right," said Moxham. "Group life offers peace of mind to employees that their household will be supported financially in the event of their death, group income protection provides continued pay for employees who are unable to work for any length of time due to illness, injury or disability and group critical illness supports people with a lump sum payment at a time when they have received the news of a devastating diagnosis. All offer quite distinct benefits, but also work well together."

Further reading

More than half of young workers struggle more during winter

• Group Protection
• 22 March 2019

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• Topics
• Group Protection
• Employee Benefits
• Critical Illness
• GRID
• Katharine Moxham
• group critical illness