What role do group risk benefits have in financial, mental and physical wellbeing?

Employee wellbeing has risen to the top of employers’ corporate agendas in 2014, but it should be more than just a tick-box exercise.


If you read nothing else, read this…

  • The provision and communication of group income protection and life assurance are key to securing employees’ sense of financial wellbeing.
  • Added-value services, such as an employee assistance programme, can help to support staff with mental health issues.
  • Early intervention and vocational rehabilitation are key elements of group risk products to ensure that staff with physical wellbeing issues can return to work.

In developing and designing an overall employee wellbeing programme, employers must pay equal attention to all areas of wellbeing: financial, emotional and physical.

Group risk benefits are central to optimising wellbeing because they give peace of mind to employees and their dependants in the most difficult circumstances. David Williams, director of group protection at Friends Life, says: “These benefits pay out on death or illness so that the financial worries are less, and employees or family members can think about all the other elements of getting better or dealing with their loss.”

Financial wellbeing

But group risk benefits are often overlooked. Iain Black, head of corporate risk at Zurich, attributes this to a lack of communication and employee awareness. “Employers should take the opportunity to teach their employees awareness and help them fully understand the position they would be in if they were in ill-health,” he says.

Unum has developed an online application that enables staff to calculate how long they could survive financially if they were to fall ill suddenly, based on their current bank balance.

Joy Reymond, head of vocational rehabilitation services at Unum, says: “Employers could use that to engage their employees in how important it is to have that protection because people just aren’t saving any more. It’s a thought experiment. And then the employer can say: ’that’s why we have group risk benefits’.”

Employers need to help staff avoid getting into a situation where they cannot sleep at night because they are concerned about where their next pay cheque is coming from, Reymond adds.

Coverage level

If an employer provides group risk benefits, it also has a responsibility to encourage staff to be aware of what level of cover they have, such as group life assurance at four-times salary or group income protection (Gip) at 50% of salary.

Mark Bingham, a partner at Secondsight, says: “Not enough people carry enough life cover. Organisations need to educate employees to give them a better understanding of the fact that looking after their family is really important and that group cover is a really good start to make sure their family is well provided for.”

Typically, employers will provide a basic level of group risk cover as a core benefit and then allow staff to flex it up as part of a flexible benefits scheme, or add in cover for their dependants.

Chris Rofe, vice-president, employee benefits at Lockton Benefits, says: “Group income protection policies can work well within a flexible benefits environment, as can life assurance. But it is important for the employer to put a core level of cover in for everyone.”

Effective communication strategies explaining and promoting the benefits is key to their take-up, he adds.

Bingham adds: “With flexible benefits, there is even more need for financial awareness, so people make the right decision and don’t take it all as cash.”

If group risk products are included in a flexible benefits scheme, it is useful for employers to communicate with staff at key life stages, such as when they get married or become a parent. “It is important for the employer to communicate how that benefit supports not only the employee, but the family as well,” says Zurich’s Black.

Ways to communicate

There is a range of ways to communicate with staff about how group risk benefits tie into their financial wellbeing. These might include materials from the insurer, such as posters, case studies, flyers, articles or online content.

Paul Avis, marketing director at Canada Life Group Insurance, says: “When an employer buys a financial product, one of the most effective things it can do is communicate the totality of it.”

This totality includes added-value services, such as an employee assistance programme (EAP) or vocational rehabilitation services. Although EAPs can be used for financial issues, such as debt counselling or legal advice, they are mainly used for emotional or mental wellbeing problems.

Avis says 20% to 25% of all of Canada Life Group’s Gip claims relate to mental health and stress.

Unum’s Reymond says: “An EAP is a very good product for preventing long-term stress and mental ill-health, or dealing with legal or financial problems that have a knock-on effect. Joining that up with Gip can be very powerful.”

EAPs are just one tool in the group risk toolbox to tackle mental illness or emotional issues. They are effective in helping an employee talk through a problem, but there are other tools that can be used in a preventative capacity.

Early intervention

Early intervention, emotional resilience programmes and vocational rehabilitation services can also be part of a group risk package.

In the case of emotional wellbeing, early intervention is used to determine whether there is a workplace or a clinical issue. If the reason for an employee’s absence has its roots in the workplace, a dialogue can be facilitated between the line manager and the absent employee. If there is a clinical mental health issue at the heart of the matter, it has to be determined whether the employee can return to work and in what capacity.

“Clearly, the earlier the intervention, the quicker we can get the employees back to work,” says Zurich’s Black. “When staff are off with these types of illness, if they are ignored or not picked up on early enough, that condition tends to exacerbate over time. The quicker you can get in and have that conversation, the better.

“Effective management of an employee absence delivers better business benefits. It minimises the negative impact. It is healthier for us all to be in the workplace: we are more positive, more engaged. And to be supported by an employer is a positive thing.”

Coaching and training

Employers can also take advantage of the coaching and training sessions that are provided through many group risk insurers. Reymond says: “We can help staff manage stress more effectively, through better line managers or more enlightened HR policies: all the things a good income protection insurer will support an employer with.”

Black believes a lot more training is needed, not just with leadership teams or managers, but with employees themselves because they are the ones sitting beside any peers who are returning to work after a period of, say, stress-related absence. 

Again, these offerings and their alignment with employee wellbeing can be fully understood only if they are well communicated to staff. Friends Life’s Williams says: “Where employers promote EAPs, we see usage go up to just over 10% of employees. Where it is not promoted, we see around 0.1%.

“When an employer is supportive of an employee and works with them, there is a halo effect around that area of the team. It shows that the employer is concerned about employees, and engagement increases.”

Mental health or stress issues are often rooted in financial matters, so this ties back to financial education and awareness in the workplace. Bingham says: “Knowing you have life assurance, that if you were off sick you would get some benefits, that will give a bit of a feelgood factor and remove some stress for people.”

Physical wellbeing

If an employee is absent from work because of a physical ailment, early intervention and rehabilitation services will be the most important aspect of a group risk scheme. Unum’s Reymond says: “If you wait for six months, most musculoskeletal problems are going to be chronic by that point.”

Physiotherapy is also often included in group risk benefits. Williams says 90% of claimants that are referred to Friends Life in the first few weeks of suffering a physical ailment will have returned to work or be in the process of a phased return within three months, once they have been discharged from these referrals.

“The measures of stress, in terms of depression and anxiety, will improve over that period of time as well,” he says. Employers should bear in mind that staff off work with a physical ailment can often consequently suffer mental ill-health too, Williams adds.

About 30% of Canada Life’s claims involve musculoskeletal issues, but Avis agrees it is important to remember that a physical problem can eventually turn into an emotional one as well.

“The Health and Work service that the government is launching as a pilot in the autumn acknowledges that four weeks is the optimal time to get involved, as mental health begins to supersede physical health as the cause of the absence,” he says.

“Getting in early, at two weeks for mental health and four weeks for physical health, with an experienced rehabilitation consultant is the benefit employers are buying. There is a clear alignment between the group income protection product and both mental and physical health. As an employer, it saves occupational sick pay and helps prevent long-term absences that can adversely affect premiums.”

Difficult conversations

Ensuring that employees have access to the right workplace support relies on employers having a regular dialogue with staff, which may involve some difficult conversations. But common reasons behind employees’ group risk claims are often those neglected in the workplace, such as death, cancer or mental illness, because of the sensitivity of the subjects. 

Reymond says this should not deter employers from promoting their group risk benefits. “If push comes to shove and somebody is off work for a long time, it does help to know this service is available and it is helping staff,” she adds. 

“If an employee has cancer and is getting better, they could come back to work and talk about their experiences. That might be a way of creating a culture where people talk about these life events and how the benefits have helped them.”

Black adds: “All these benefits ­enable the employer to provide support for their employees in that time of need. The three types of cover [life assurance, group income protection and critical illness insurance] can be layered upon each other for an ideal employer to give peace of mind to the majority of its employees.”

Case study: BlackRock


Asset management firm BlackRock rebranded its financial education programme for US staff in April 2012 by grouping it into three financial wellness categories, one of which was group risk benefits.

This included group income protection, life assurance and accidental death cover, available to all staff as core benefits up to a certain level. Employees can choose to flex their life cover up to a higher level or to include their partner’s life through the flexible benefits scheme. Critical illness insurance is also available via flex.

The focus on group risk benefits was important, because being prepared for the unexpected is how employees make sure they and their loved ones feel secure, says Katie Nedl, global head of benefits at BlackRock.

“It is commonplace for people to think about financial wellness as budgeting, saving and investing,” she says. “We think it is also important to approach financial wellness from the perspective of protecting your income and your assets. We encourage our employees to plan for their goals, whether short-term or long-term, as well as the unexpected.”

Calender of topics

BlackRock has a rolling calendar of topics it communicates to staff through a financial wellbeing space on its internal social media platform, poster campaigns and deskdrops.

It also hosts themed financial wellbeing workshops. An upcoming session will cover its employee assistance programme and how it can be used to support debt management, discounted will writing services and financial management workshops.

The organisation has also been working with its diversity and talent management teams to target specific communications to certain groups of staff.

Nedl says: “For instance, arranging for someone to talk to our families network about the importance of having sufficient life and income protection cover, and talking to our graduate recruits about the importance of early financial planning.” 

Katharine Moxham: Group life assurance gives employees peace of mind

Employers are in a unique position to facilitate affordable protection cover for their staff. Group risk benefits are highly prized by employees and are seen as essential for attraction and retention of staff. They are primarily valued for providing financial protection for employees and their families, but they can support both employers and employees with far more than that.

Katharine Moxham

Group life assurance gives peace of mind that families will be financially looked after if the worst happens. Any bereavement support offered alongside the policy often extends to line managers and colleagues, as well as family members. 

Business continuity

Group income protection is used by employers as a business continuity tool, providing the interventions needed to get employees back to work in a timely manner, such as fast-track access to physiotherapy or talking therapies. It also provides an employer with the financial advantages of having insured its liability to continue paying salary in the event of a long-term sickness absence. 

A group critical illness payout can supplement sick pay or perhaps go towards additional costs faced by the employee, such as home modifications or private therapeutic care.

Group risk policies give both employees and employers access to a wide range of extra support that can be used daily, even if a claim is never made under the group risk policy.   

Support services

Such support services can include vocational rehabilitation, absence management, employee assistance programmes, HR advice, GP helplines, online health assessments, second medical opinion services, counselling and occupational health.

Group risk policies are used to manage people risk and will overlap with personal accident, employer’s liability, private medical insurance, occupational health, health and safety, wellbeing and more.

Understanding what comes along with a group risk policy, and when and how to use it in conjunction with other programmes, is vital and merits key consideration. 

Katharine Moxham is spokesperson at Group Risk Development