What is Group Salary Continuance Insurance?
Group salary continuance insurance, also known as group income protection, is a type of cover that provides a monthly benefit to replace up to 75% of your income, when you are unable to work in normal capacity due to an illness or injury.
- Cheaper premiums. A group salary continuance policy allows employees of a company to obtain the group policy at competitive wholesale premium rates.
- Easy to maintain payments. Premiums are usually automatically taken out of your superannuation.
- Automatic acceptance. Medical exams rarely required for group salary continuance policies.
Who's eligible for group salary continuance?
Group salary continuance cover is only available to employees and members of group super funds.
Key features of group salary continuance insurance
Some of the features and options may include (but not limited to):
- Your choice of benefit period: You have the option to choose how long you would like to be covered for, usually from 2, 5 years or up until the age of 65.
- Your choice of waiting period: Waiting period is the amount of time you will have to be unable to work until you receive your first benefit payment and it is usually available from 30, 60, 90 to 180 days.
- Death benefit: A multiple of the insured salary amount is payable if the policyholder dies.
- Total and permanent disability benefit: A benefit amount is payable is the insured employee is unable to work due to an illness or injury.
- Partial disability benefit: If the policyholder can only work at a reduced capacity due to an illness or injury after a predetermined amount of time from suffering from a total disablement, a benefit will be payable.
- Recurring disability benefit: If the insured member is suffering from a relapse of a disability that the member has obtained the benefit payments for upon returning to work, the waiting period will be waived.
- Rehabilitation assistance: All the rehabilitation costs that incur during the period of your illness or injury may be reimbursed.
- Interim cover: Automatic accident cover for when the member’s application has not been yet approved and/or was being underwritten.
- Guaranteed renewable cover: The policy will be renewed each year, as long as the premium payments are met and no further medical exam is necessary, regardless of the changes in health.
- Worldwide, 24/7 cover: Cover will be provided all year round, no matter where you are.
Depending on your employer’s agreement with the insurance provider, you may also apply for group life insurance and/or group TPD cover if they are on offer.
What are the benefits and drawbacks of group salary continuance for workers
If you are an employee and you have been thinking of obtaining an insurance cover on your ability to earn, then group salary continuance insurance through your employer’s super fund is a good place to start. However, you should also be aware that there will be some drawbacks if you are looking for a more comprehensive cover.
Why should employers consider group salary continuance insurance for their workers?
Group salary continuance insurance can provide employers with a competitive edge. Some of the underlying benefits include:
- The ability attract good workers
- Retain current employees
- Increased job satisfaction
- Increased level of productivity and loyalty.
- Less delay in returning injured and ill employees back to work (e.g. through rehabilitation benefits)
- Better relationships between employers and employees
Questions our users have about salary continuance insurance
What is group salary continuance insurance?
It's a type of risk insurance that provides coverage of up to 75% of an average monthly salary for workers who are unable to work due to an illness or injury. This policy is designed to protect employees that are members of a super fund and to provide employers means to protect their company's assets.
How many employees will a company need to have to obtain a group policy?
Some insurance providers will offer policies to groups as few as 10 members, while some others may require at least 20 members. The minimum number will vary between providers, so it is important to check with the insurer.
Will there be tax benefits for the company which obtains group salary protection cover?
Companies will be able to take advantage of tax deduction from the premiums paid and its benefits will not attract any fringe benefits tax or GST.
Group salary continuance insurance is recommended for employers if you are looking to provide additional level of protection for your workers and for employees, especially at times of prolonged illness and injury and a time off work is required for full recovery. Group salary continuance can provide financial security that is truly valuable for both employer and employees.