Income protection as a benefit to employees is one of the better perks of working for a quality company. One of the primary reasons that income protection is important for companies to offer is that not every individual is eligible for income protection outside of a corporate benefit package. In this article we will look at:

・ Some of the reasons why income protection is a good option.

・ Some of the benefits to employers that offer income protection to employees.

Some of The Reasons Why Income Protection Is A Good Option

First, income protection is one of the most underutilized forms of insurance available to both businesses and to individuals. As a business that employees workers, and allocates resources to train them, income protection is much like an insurance policy for your investment.

If one of them became disabled, used up all of their sick time and disability insurance, than income protection would pay a portion of their income until they were able to return to work. If they are able to return to work than the employers investment is not lost. It pays to offer income protection to employees because income protection allows a disabled employee to survive without all of the financial worry that would go along without income protection.

Second, Offering income protection as part of a benefit package shows employees that the company cares enough about them to provide for their future if something catastrophic should occur. Say an employee becomes disabled and uses all of their sick time, vacation and runs out of disability insurance. The fact that income protection will pick up where disability leaves off makes a business that provides such benefits a hero. It solves the problem of what to do without having to walk away from someone who is in a bad situation. After all, it is unlikely that any business would just continue to pay an employee who is disabled.

Some of the Benefits To Employers That Offer Income Protection To Employees

Perhaps one of the biggest benefits to employers that offer income protection insurance to their employees is the fact that the premiums are tax deductible. This is also one of those employee benefits that normally is not considered taxable as a fringe benefit. They key word is normally, because the New Zealand tax laws change often regarding income protection. Because of the frequency of change in the tax laws, the tax benefits should be checked annually.

Another benefit to employers the opportunity that creating trust between employer and employee can be a positive experience. Income protection is one of the vessels by which an employer can demonstrate that it cares about its employees. When employees feel like they are cared for their productivity rises, their loyalty to the company rises, and the value of your workforce increases.

Statistically, employee related income protection claims typically last about one year. That is a long time to go without receiving a pay check. If we go back to the investment that employers invest in workforce and labor, than it is easy to see why income protection as a benefit is important to both the employee and the employer.

Income protection has been part of the leadership benefit package for most larger corporations for many years. The cross over of income protection from executive to standard employee has been increasing over the last several years. The primary driving force behind this trend is the investment in, retention and attraction of high-quality employees.

The government, too, has stepped up and made the premiums a tax deduction. This take the burden of civil welfare off of the government which frees up tax money for other expenses. The average cost of premiums is about 1% of annual payroll. Income protection as a corporate benefit is usually available for groups with more than ten employees. Not every industry or job position may qualify, but that is mostly because of the nature of some jobs.

Insurance is about risk and high risk positions may not qualify. Employees care about income protection because in the event of a claim, employees can be paid up to 75% of their annual salary. Quality income protection plans will have language that discusses partial disability and even back to work programs. It is my hope that this article has provided quality information that will help readers to understand why income protection is not only important, but also a positive and beneficial part of any benefit package.



(This article and all articles on this site are not to be taken as professional insurance advice and information may not be accurate, for insurance advice please speak to a registered insurance broker. We can connect you with a broker by using the form on this site.)