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Understanding group critical illness cover

Understanding group critical illness cover

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Given that GCI schemes plug the cover gap left by group life assurance and group income protection schemes, they can provide invaluable financial support to your employees in times of need. Therefore, they should always be given due consideration when designing an all-inclusive, well-rounded benefits package.

Take-up for GCI cover is now on the rise. The Swiss Re Group Watch 2023 report shows an 11.6% increase in in-force group critical illness policies in 2022. If you already have, or are considering implementing a group critical illness scheme, you should ensure that your employee communications reference the following important key points:

  • Critical illness premiums are a P11D taxable benefit, and what this means for an employee’s tax liability
  • A critical illness diagnosis can be life-changing; critical illness insurance will provide a degree of financial security at a vulnerable time, and so can have a big impact on reducing stress in the event that it is needed
  • Critical illness benefit is paid tax-free, and can be used however an employee needs to help their recovery
  • Insurers apply pre-existing and related conditions exclusion clauses: this enables greater ease in joining a scheme, but it is important to be aware that this applies a degree of uncertainty at the point of claim. The insurer will consider the medical evidence during a claim assessment to determine if there pre-existing elements to the condition.
  • Following on from the point above, not all illnesses are covered. The insurer generally has a list of about 20 core conditions and 20 supplementary conditions that are covered. Clarity on the insurer’s specific definitions of the actual conditions that they are being covered can be provided on request.
  • Critical illness cover is often included for children, at no additional cost
  • Additional, complimentary employee support services are often provided by the insurer, such as:
    • A personal nurse service,e to provide employees with long-term practical and emotional support
    • A second medical opinion service, to ensure that employees are getting the correct diagnosis and best available medical advice on treatment options

Employees will only value the benefits that they are being provided with if they have a clear understanding of how they meet their specific needs, at any given time in their working lifecycle. The medium and language used in communicating with employees is a key component to an effective benefits strategy, and can have a big impact on the perception and value associated with them. In the case of benefits such as critical illness cover which can require more in-depth understanding, this is especially crucial. The right communications strategy can drive engagement, improve absenteeism, increase benefit take-up rates and, ultimately, improve your ROI.