3.7 billion was the total cost of long term sickness to the UK economy in 2009.

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1 What is Income Protection? There is a huge unrealised need in the UK to protect employees better if they get ill and can t earn a living for an extended period of time. 3.7 billion was the total cost of long term sickness to the UK economy in (CBI) For some time, the Government hasn t been able to provide sufficient benefits to protect the lifestyles of most working people if they are unable to work due to injury or illness. With an unprecedented budget deficit to tackle, the Government is cutting back on public spending, which includes welfare support. While the Government steps back, employers and employees are being asked to step forward to take on more responsibility in times of illness or injury. Income Protection provides a regular income if you re unable to work because of illness or injury. Some employers have a Group Income Protection policy, which provides a replacement income if an employee is unable to work due to illness or injury. Typically beginning after 6 months absence, it can pay up to 80% of the claimant s salary until either they return to work or retire. DOC01 03/2014 Page 1 of 6

2 11% of employees have been off work for more than 6 months due to illness or injury. (ICM/Unum research) However, only 1 in 10 employees in the UK are covered by Group Income Protection. On average, UK workers could survive for just 52 days on their savings without full pay. With only limited funds available for most people from the State it s important that everybody understands whether their employer has Group Income Protection - if they do not, there are products available for individuals that are based on personal circumstances. Group Income Protection is a vital employee benefit, providing employees with an income when they need it the most together with the rehabilitation support needed to get them back to work as quickly as possible. Having a back-up plan is essential for employers. It s about planning for unexpected events that are likely to have an impact on financial security - whether that s a company s bottom line or an employee s lifestyle - like long-term illness or long-term injury; it s about investing in a financially secure future for peace of mind in the good times and protection in the bad times. Employers are best placed to provide Income Protection to employees due to: Affordability - Income Protection is cheaper for the employee when it is provided by the employer than buying individually Availability - Some people would be refused Income Protection if they were to buy individually, due to existing medical conditions Accessibility - Most people don t have access to IFAs to buy Income Protection individually DOC01 03/2014 Page 2 of 6

3 1 in 10 private sector workers in the UK have insurance to protect their income if they fall ill. (ICM/Unum research) Income Protection forms a key component of a comprehensive employee benefits package and can help employers manage the internal risk of an absent employee and provide crucial financial support to employees and their families in the unfortunate event that they can t work or earn an income. The risks of illness or injury leaving an employee unable to work for 6 months or more are real. 11% of UK workers have experienced it and it s 3 times more likely during your working life than dying. Yet, though many people have Life Insurance, just 1 in 10 has Income Protection. The average cost of an Income Protection policy (based on this being provided by the employer) is around 200 per employee, per year. Unlike other insurance products, it pays out over a long period of time - until you either retire or return to work. Income Protection is also a regular source of income to rely on, so no need to worry that a lump sum may run out. Through an employer s Group Income Protection policy, rehabilitation experts can work with employers and employees who are ill or injured and off work. They can provide the guidance and support needed to help the employee take control of their life and - when they are ready - help get them back into the workplace. Rehabilitation services can help an employer to address the barriers for an employee returning to work and develop a plan to get them back into the workplace. Ongoing management helps to make adaptations to the plans if situations change and provides support to both the employer and employee in doing so. DOC01 03/2014 Page 3 of 6

4 52 days is the average UK workers could survive on their savings. (Yorkshire Building Society) By having Group Income Protection, an employer can provide a valuable employee benefit, which not only serves the employee but the employer too. Two million workers currently employed in the UK have had to take 6 months or more off work during their career. Staff costs can be planned with confidence by managing the risk of employee absence due to illness or injury. Having Income Protection not only offers your employees protection against long-term illness or injury but it also helps to motivate staff through your investment in them. DOC01 03/2014 Page 4 of 6

5 Income Protection is more than just insurance. The rehabilitation element is key to ensuring a faster return to work - CSC CSC CSC is a global company that offers IT consulting, systems integration & design, IT & business process outsourcing, applications software, and web & application hosting businesses. It is a US company with offices in Europe, Asia and Australia. In the UK, CSC has around 8,000 employees. CSC has been offering Income Protection as a core benefit to its entire permanent UK staff since 1995 and has been with Unum since It first introduced IP to offset the reduction in the ill health cover element of its pensions. The policies benefit both the employer, who retains loyal staff, and the employee, who is supported when they are at their most vulnerable. Income Protection is more than just insurance. The rehabilitation element is key to ensuring a faster return to work. In the long term, early intervention which Unum does well means that future premiums fall, creating significant long term cost savings. This is all the more important with HR teams becoming very lean and being able to rely on companies like Unum to help support their employees as they transition back into the workplace. IP with rehabilitation helps HR departments to manage long term absenteeism. said CSC. DOC01 03/2014 Page 5 of 6

6 Over the past six years, CSC has seen a 42% reduction in its premiums, and the number of people off sick for more than six months has fallen by 46%. - CSC The IP policy kicks in after 6 months, but CSC usually engages with Unum after 4 weeks of absence to start to facilitate a return to work, or to help the employee to manage their sick leave. Since working with Unum on IP and associated rehabilitation, CSC has seen a reduction in sickness-related absence predominantly as a result of early intervention. They have seen that employees return to work more quickly with support from Unum. Over the past six years, CSC has seen a 42% reduction in its premiums, and the number of people off sick for more than six months has fallen by 46%. Cover depends on policy - conditions apply. Unum Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England DOC01 03/2014 Page 6 of 6