A guide to Global Income Protection

Why an international plan may be the best option

The financial strain on both employer and employee arising from the long-term sickness or injury of staff working abroad can be considerable. This is particularly true for countries where there is minimal or no state sickness benefit provision.

There is a solution. A Group Income Protection plan, otherwise known as long-term disability insurance, protects a business’s liability to pay a proportion of an employee's salary.

Skilled employees, wherever in the world they are based, expect to receive a consistent benefits package. In some cases their retention may even depend upon it. Many companies assume however that a UK policy will be adequate for members of staff working overseas - this will not always be the case and business must ensure that their global employee policy covers this eventuality.

Employees protected by a UK policy may not be covered, for example, if they happen to be contracted to a company’s registered office abroad. In addition, foreign nationals working in the UK may not be suitably covered by a UK policy held by a UK registered company.

Furthermore, UK policies reflect the welfare set up in the UK, and this may not be applicable for the corporate practices of countries where employees are resident. By contrast, Global Income Protection schemes are not constrained by the restrictions of employee locations, and the legal frameworks of UK policies.

What cover will a Global Group Income Protection plan provide?

A Global Income Protection plan provides an annuity benefit to employees - a proportion of an employee's salary - should they become partially, or totally, disabled due to accident or sickness. Benefits are paid regardless of where employees are located. This benefit payment is usually between 50 and 80 per cent of employees' normal earnings, up to a maximum, pre-specified, annual limit in line with country-specific regulations.

Benefits payments are made when an employee has been off work from as little as three months. These payments will normally cease upon returning to work, death, leaving an employer's service or upon reaching the policy's terminal age. It is worth noting that some domestic policies may restrict the payment duration or require repatriation of the employee after two years.

Where ill health causes early retirement, policy payments can fill the gap for employees until the inception of their pensions. Alternatively, employers can keep policy payments to offset the costs of an early pension. Rehabilitation services are provided with some policies to help nurse absent employees back to health, and back to work, as soon as possible.

Contact Willis PMI Group 

For more advice about Global Income Protection plans, please contact one of our specialist consultants on 01606 353260.