Beyond the core reason for the insurance, it is safe to say there are more differences than similarities between individual and group products — whether there to protect against the financial consequences of death or disability.
In this column, we investigate what each has to offer, whether it is worth choosing one over the other, and the challenges these markets face.
Whether new to the protection industry as a whole, new to the individual or group markets or thinking about advising across both, the following will provide you with lots of insight from lots of experts.
Similarities and differences
The most obvious difference is the customer and their different motivations for purchase.
In the case of group protection, the employer is the customer. They are purchasing cover as part of an employee benefit package. “An employer may consider group protection benefits to help them mitigate financial and operational risks related to employee ill health, sickness absence and death in service,” explains Aviva group protection sales director Jason Ellis.
So, decisions on the type and level of cover are made by the employer “on behalf of” employees, usually through the advice and support of a professional intermediary, says LifeSearch chief marketing officer Justin Harper.
“With group protection, the individual employee is distant from the insurer,” he adds. This is the case when it comes to product design at least, not so when it comes to any early intervention or rehabilitation support required. More on that later.
Over the years, the remit for group protection has expanded. Employers now look to offer a broad suite of benefits to help attract and retain employees.
Ellis uses the example of group income protection offering early intervention support for employees. This is about giving staff direct access to various services — from employee assistance programmes to virtual GP services — to help nip problems in the bud early.
When an employee goes off sick — and their employer thinks it could end up being a long-term absence — insurer support, via referral from the employer, might also include an assessment by a vocational clinical expert and tailored support provided by a range of specialists. The goal is to help the individual get back on their feet and return to work, wherever appropriate, before a claim even kicks in.
In short, these days group income protection is “as much about prevention as it is about providing a financial benefit when it’s needed most”, says Ellis.
Legal & General group protection claims and governance director Vanessa Sallows says that thinking in the group income protection space has really evolved over recent years.
While it has always been about supporting people back to work, wherever possible and appropriate, there is now a strong understanding that this is about more than mitigating employer risk. It is also about work being the driving force for employee wellbeing and, hence, engagement and performance.
