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These products are designed to help protect an employee’s financial wellbeing. Also in this category are Flexible Benefit Systems and Total Reward Statements.
Some of the policies available include:
Pays a tax free (subject to HMRC approval) lump sum on the event of a person passing away during their employment. These policies are usually viewed as an allowable trading expense by HMRC.
Continues to pay a proportion of an absent employees salary for a set period. As an example benefit payments could be limited to 2, 3 or 5 year term, or paid until normal retirement age. Options are available in terms of the percentage of salary an employer is prepared to cover, and on the waiting period before a claim starts paying. Where possible, insurers aim to provide effective rehabilitation services, targeted to achieve a mutually beneficial return to work for the absent employee.
Pays a tax free lump sum to an employee after diagnosis of any of a predetermined list of critical illnesses, as declared in the policy documentation.
Often seen as a precursor to a full flex scheme, Total Reward Statements (TRS) provide a centralised platform that pulls together and values all incumbent employee benefits. This enables employees to easily view their total reward package provided by their employer. These portals are also a good central storage unit for documentation relating to the benefits in place, and can be used for holiday requests and tracking.
A popular phrase used to describe Flexible Benefit Systems, is ‘cafeteria style’ benefits, as the options available are usually presented to employees through a menu driven system. Benefits can include tax-efficient salary deduct options, such as childcare vouchers, cycles to work and computers, as well as providing access to a host of discounted group self-pay products, such as private medical insurance, dental cover and travel plans. An employer can decide to offer a fund from which employees can choose to purchase the benefits they believe most relevant to their specific situation / life stage.