Friends Life enhances GIP policy

Friends Life has enhanced its group income protection (GIP) policy.

It will increase the maximum benefit available under the GIP policy from £350,000 per year to £425,000. Pension scheme and national insurance (NI) contributions can be insured in addition to the maximum benefit.

Friends Life has also removed the 5% limit on employee pension fund contributions. The maximum amount of pension contributions that Friends Life will include is 40% of salary or £75,000, whichever figure is lower.

Its enhancements also include increased flexibility around limited benefit payment periods by offering additional lump-sums options. Policyholders now have the option of selecting a lump sum of two, three, four or five-times salary, as opposed to the previous limit of one-times salary.

In addition, it has made changes to reflect government changes to the Employment and Support Allowance (ESA), with the introduction of a simplified option where the ESA is only deducted for 12 months. The basic benefit payable under this policy will increase by an amount equivalent to the ESA once benefits have been paid for a year.

Friends Life has also enhanced the standard Actively at Work requirements for schemes of between 20 and 99 lives. Where employees are not actively at work on the cover commencement date (if they are off ill, for example), their cover will now start on the next day they are actively at work, rather than having to wait for five days or having to supply additional evidence of good health.

A new online toolkit to support the existing employee assistance programme (EAP) is also available.

David Williams, director of group protection at Friends Life, said: “These enhancements to our group income protection proposition reflect the changing demands of employers and government reforms to state benefit entitlements.”