Competitive group risk providers are offering an increasing range of free add-on services and products to their core cover plans, says Sam Barrett
Group risk benefits are designed to pay out an agreed amount of money in the event of a claim made if an employee is unable to work. But, increasingly, it is possible for employers to obtain all sorts of extra benefits alongside this core cover that can be used whether or not a claim is made.
These extras can be split, broadly, into two types. First, there are those that benefit the employer, such as business support services and helplines covering legal and employment issues. Second, there are services aimed at employees, including employee assistance programmes (EAPs), gym discounts, and health and wellbeing tools.
Insurers are adding these freebies for a number of reasons. Glenn Laming, sales director for group protection at Legal and General, says: “We are insuring employees against death and sickness, so it makes sense to help employers promote health in the workplace.”
Add-ons can also improve the value of the group risk proposition, especially on products where claims incidence is low. Dave Middleton, client relationship director at benefits consultancy Portus Consulting, says: “On average, only one in 300 people will make a claim on group income protection (GIP), so these extra benefits can help the employer and employee feel they are getting some value from the plan.”
But offering extras is not purely altruistic. “Offering these benefits creates greater stickiness,” adds Laming. “If an employer or employee uses them, they are less likely to want to lose them.”
Also, although another scheme might be slightly cheaper, where these benefits add value, the employer may be prepared to pay extra for the pumped-up plan.
Of all the group risk products, GIP attracts the greatest number of add-ons. One of the most common is a stress counselling helpline, with an EAP regarded as the most comprehensive of these services.
Best of breed
Unum introduced its EAP, which is run by Ceridian, last November. Wojciech Dochan, head of commercial marketing at Unum, says: “This is very much best of breed. As well as the 24-hour helpline, it includes up to three face-to-face counselling sessions for every presenting issue, subject to a maximum of nine per employee each year.”
Legal and General also offers an EAP with all its GIP plans, with an option to include face-to-face counselling at an extra cost.
Instead of an EAP, some insurers provide other helplines. For example, Aviva offers a stress counselling helpline and a GP helpline. Andy Stephenson, group risk sales manager at Aviva UK Health, says: “These provide reassurance and support to employees, but can also help an employer reduce absence. For example, rather than having to take time out to see a GP, an employee can call the helpline and, where possible, will get an instant diagnosis. Further, although these services are confidential, we would flag up the GIP scheme to an employee if we felt they might benefit from some early intervention services.”
Another freebie that can offer employees reassurance is Best Doctors, which is available on Canada Life’s and Generali’s GIP schemes and offers staff and their families access to a second opinion from highly-respected doctors around the world. Colin Micklewright, head of income protection business development at Canada Life, says: “This has had a very positive reception from employers, especially those that want to differentiate themselves.”
Do-it-yourself health assessment tools are also common. For example, Bupa’s Positive Health online service is offered to all employees covered by its GIP plan. This gives them access to health information and a personal assessment tool. Aviva offers a similar service.
Some add-ons are less health-focused. For instance, Legal and General offers employees access to a range of discounted goods and services through its Workplace Rewards scheme. These include free eye tests, deals on wine and electrical goods, and offers on environmentally-friendly products. “We have recently revamped this service to make it more personalised,” says Laming. “It is now dual-branded with the organisation, so the employee sees it more as a benefit provided by the employer.”
Specialist advice on group risk products
Some GIP policies also come with benefits for employers. “Business Care is an integral part of our plan,” says Micklewright. “It gives employers access to specialist advice in five different areas, including health and safety, tax and employment issues. While it appeals predominantly to small and medium-sized enterprises, there is also plenty of interest from larger employers because it can give a second opinion to their in-house advice.”
Other insurers that provide some form of business support to employers include Legal and General, which also offers interactive training guides for line managers, and Unum, which offers an online and telephone-based support service to up to five employees within an organisation.
The size of the group critical illness insurance market means there are fewer adds-on, but some providers do offer extras. For instance, Bupa gives employees and their families access to its 24-hour telephone helpline, Bupa HealthLine, as well as making its online health assessment tool available to staff.
Some resistance to group risk extras
Whatever the product, the usefulness of these extra benefits varies. In some instances, the freebies are not well appreciated, with resistance from both advisers and employers. Criticisms that insurers have encountered concerning such extras include not wanting to duplicate a benefit that is already in place; not wanting to pay for something that will not be used; and not wanting to be tied to an insurer because employees grow attached to the add-on.
But Middleton believes such add-ons are worth having. “We have seen clients cancel the EAP they have been paying for when they receive a free one with a group risk product,” he says, adding that the problem may be more about the way the benefits are communicated.
“We give a lot of information about these extra services to employers, but it is not always passed on to the employees,” he points out. “This is a shame, because tangible benefits such as a GP helpline or an EAP can help to promote the more intangible benefit of a group risk product.”
Given the value these add-ons can bring, it is certainly an area that is set to develop further over the next few years as insurers compete for business in the group risk benefits market.
Group Life add-ons
With premiums relatively low for group life products, it is unusual for a policy to include any add-ons. But with competition fierce in this market, more and more are being added.
The nature of the product means bereavement helplines are among the more common add-ons. For example, Aviva added one to its plan this May. The helpline, run by PPC Worldwide, gives support to the relatives and partners of group life customers who have died, as well as providing support to customers who have suffered a bereavement.
Group life add-ons can also focus on improving health. For example, Bupa includes its 24-hour health information line in its group life plan, while Aviva rolls out discounted gym membership to its group life customers.
Andy Stephenson, group risk sales manager at Aviva UK Health, says: “Encouraging a healthier lifestyle has benefits in terms of the level of absence an employer will experience, as well as helping to reduce the number of claims.”
What is group income protection?
Group income protection provides a replacement income if an employee is unable to work because of a long-term illness or injury. The benefit, which is paid to the employer, is payable after an employee has been absent for a set length of time. This is known as the deferred period, which can vary between 13 weeks and 104 weeks, although 26 weeks is standard.
Benefits are payable until the employee returns to work or reaches normal retirement age. Alternatively, employers can stipulate a maximum payment term of up to five years.
Although regarded as add-on features 10 years ago, early intervention and rehabilitation services are now a standard part of the group income protection proposition. By providing access to treatment, these extras can help people return to work sooner and, in some instances, prevent claims occurring.
The level of support varies between insurers, but the more generous plans will include access to services such as physiotherapy and counselling long before an employee reaches the end of the deferred period.
What is group critical illness insurance?
Group critical illness insurance provides an employee with a lump sum if they are diagnosed with a serious medical condition. Such conditions are generally life-threatening and include cancer, a heart attack, multiple sclerosis and a stroke.
Although critical illness insurance is a popular plan in the individual market, it is much more unusual in the group market, where it is offered mostly through voluntary and flexible benefits schemes.