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Group Insurance; Add a Spark to your Salary Package

Written and accurate as at: Feb 12, 2015 Current Stats & Facts

As business owners and employees we look to provide attractive, innovative and value add salary packages to enhance and retain employees; one offering worth consideration is Group Salary Continuance Insurance, known as SCI.

SCI provides Insurance for a group of people generally linked by a common factor, such as an employer, provided a minimum of around 10 people are included in the policy, working in a non-hazardous environment.

This product, provided by several market leading insurance brokers, enables monthly income replacement of up to 75% of an employees' package to those persons that are unable to work due to illness or injury for periods longer than the waiting period. The standard policy will pay a benefit for a maximum of 2 years.

The attraction for employers is offering an added benefit to the employment package at very reasonable premium rates. For employees the attractiveness of the policy is 2 years free SCI cover, creating the opportunity for the individual to then seek additional cover beyond the 2 years with extended waiting periods, hence providing considerable cost savings.

Most providers will cap the level of cover (experience is around $130,000) and underwriters do not need to know any more than the employees date of birth, salary and occupation. That means any employees with pre-existing medical issues are ignored as they are assessed for risk as a group, not individually. For professional, office style environments it could be the added extra employers can offer as a means of retaining quality team members and reducing the recruitment burden.

For the employer, administration is simple with annual reconciliations, so no need to add/remove staff as they come and go. If a signed contract is in place, team members are generally covered.

Consider Group Salary Continuance Insurance at your next salary package review. 

Prepared by Matthews Steer Chartered Accountants

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