Yesterday I attended the Cover magazine 2013 Protection Forum in London. As the name suggests, the event focus is on protection products, such as Life Assurance and Income Protection.

One presentation (from the insurer Legal and General) provided the following statists:

34% of the UK working population are covered for Group Life Assurance (i.e. under a policy paid for by their employer).

8% of the UK working population are covered under a Group Income Protection plan (again, funded by their employer).

Whilst this is no surprise as such, it does highlight a huge potential risk for the UK’s working population. Many of those employees not covered will, of course, have personal insurances in place. But it would be interesting to establish what the true level of under-protection (i.e. those not covered for either eventuality from work or personal insurances) for these two risks in the UK currently is. I’m not sure if this figure exists or not (and if you know, please send me the details), but I am fairly certain that any such statistic would demonstrate that a huge slice of the working population has no cover for one, or both, risks.

To add to the above findings, Jelf’s own research at our May event in London demonstrated that almost a quarter of employers (23.34%) did not offer either benefit to some or all staff, with around half the audience only offering one benefit (26.67% offering Life Assurance, 25% offering Income Protection) to some or all staff. The definition of “some or all” is important here, as for many employers cover will only be extended to certain groupings (for instance senior management).

Whilst I appreciate that there is no legal compulsion for an employer to offer either benefit, it does seem rather strange that these low-cost and (often) tax-efficient benefits are being overlooked by so many employers.

As we have covered on this blog (and at our seminars) many times before, the risks for the employee and his/her family are very real, yet the costs to the employer relatively low. For instance, the cost of providing life cover for an employee is usually dwarfed by the employer’s pension contribution for that same individual. And as per my post earlier this month ( https://www.jelfgroup.com/blog/2013/09/group-lifes-image-problem/ ) such cover also helps the employer tick the moral and paternalistic duty boxes as well.

So, if you are one of those employers that does not currently offer either benefit, I would suggest that this might well be an area to consider again come the next review of your benefits package.

Best regards

Steve