Income Protection Insurance

Long-term sickness absence (defined as periods lasting longer than six months) costs public and private sector businesses £6.5bn a year. While this is an abstract concept, to put it into relative terms, it can be as much as 16% of your payroll and very few companies have active resources in place to reduce these costs and as such, can place a huge financial burden on a business’s finances.

The challenges to businesses can have far-reaching consequences –

  • Statutory Sick Pay must be paid for up to 28 weeks but many employers feel obliged to extend this timeframe
  • Other employees will have to cover the absent role resulting in productivity and morale issues as well as potential additional overtime payments
  • New or temporary staff will need training and time to get used to your corporate ethos and working culture.


Income Protection insurance helps employers to safeguard the wellbeing of their employees by providing a replacement income stream during long-term absence through illness or injury until the employee either comes back to work or retires, whichever happens first. 

Benefits will usually coincide with the end of your company’s sick pay policy. As a practical example, if your policy is to offer full pay for the first six weeks, then half-pay for the next six weeks, the Income Protection payments would kick-in after 12 weeks (known as the ‘deferred’ period). The maximum level of income that can be secured through Income Protection is 80% of pre-incapacity salary and we wouldn’t recommend a level higher than this since there needs to be an incentive for the employee to come back to work as soon as possible.

  • You solidify employer/employee relationships by offering benefits of this kind
  • You can manage the cost of absenteeism through sickness more efficiently
  • Benefits are paid to the company and forwarded onto the employee through the usual PAYE system minus tax and NI. There is no tax liability to the employee on premiums and it’s not classified as a P11D benefit.


Some policies offer built-in indexation, meaning the income would keep pace with inflation, however the greater the benefit and the shorter the deferred period, the company incurs greater costs.

For more information about Jeffreys Henry Financial’s range of Income Protection Insurance policies, please call 020 7371 5244 or email info@jeffreyshenryfinancial.co.uk


Contact Us

Jeffreys Henry Financial Services
5-7 Cranwood Street

Tel: 020 7371 5244
Fax: 020 8371 3112
E: info@jeffreyshenryfinancial.co.uk


Jeffreys Henry Financial Services Limited is an appointed representative of Vintage Wealth Management Limited which is authorised and regulated by the Financial Conduct Authority. Number 593380.  Incorporated in England and Wales.  Company number 03824520.  Registered Office: 5-7 Cranwood Street, London, EC1V 9EE. Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren't able to resolve themselves. To contact the Financial Ombudsman Service please visit www.financial-ombudsman.org.uk.

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Tel: 020 7371 5244
Fax: 020 8371 3112
E: info@jeffreyshenryfinancial.co.uk