Group Income Protection Insurance

valueman1

A friend of mine had a stroke and made a a claim on their income protection insurance scheme (Aviva) which was accepted and due to pay 60% of income.  One of the conditions is that it ends if he returns to work in the same capacity and duties.  He returned to work but after six months couldn’t manage. if he gets signed off unfit for work again will he still qualify for the replacement income? Next, if he stays off work, say for six months or more, could his company dismiss him on ill health grounds, thereby ending his income protection too?

Cairnpapple

You need to look at the scheme details. I'm currently off work on income protection insurance and, from memory, if I was to start back and then go off with the same condition within a year it would still all be treated effectively as the same claim and I would still get the replacement income.

Additionally, there was an option that if I went back but on fewer hours than previously,  the income protection would pay part of the difference - I don't know whether cutting hours might be an option for your friend or whether he needs to go off entirely. 

valueman1

Cairnpapple said:

You need to look at the scheme details. I'm currently off work on income protection insurance and, from memory, if I was to start back and then go off with the same condition within a year it would still all be treated effectively as the same claim and I would still get the replacement income.

Additionally, there was an option that if I went back but on fewer hours than previously,  the income protection would pay part of the difference - I don't know whether cutting hours might be an option for your friend or whether he needs to go off entirely. 

Thanks, say if he was off for a year plus, is there a risk the company could dismiss him on ill health grounds? I’m not sure why they would do this if the insurer is paying a percentage of income, as they don’t have to pay a salary themselves, but he says the claim ends if he leaves employment.

Cairnpapple

I don't know about the dismissal so I would also like to know the answer to that one!

Edited to add: some income protection policies only provide an income for a fixed time, e.g. 2 or 3 years, whereas others go all the way to state pension age. 

Brie

The alternative may be to apply for ill health retirement.  Basically get a pension now, whatever their age, possibly with some enhancements for the fact that it is being paid much earlier than anticipated.  In that case the individual isn't continuing in their employment.  There are some limitations where the individual has to prove their inability to work and get this affirmed again every 5 years or so.  There may also be some possibilities of getting the pension but being allowed to work in a very different role.  So a job that included driving couldn't be continued for someone who has gone blind but they might be able to get a job using a computer instead.  It will depend on the T&Cs.

valueman1

Brie said:

The alternative may be to apply for ill health retirement.  Basically get a pension now, whatever their age, possibly with some enhancements for the fact that it is being paid much earlier than anticipated.  In that case the individual isn't continuing in their employment.  There are some limitations where the individual has to prove their inability to work and get this affirmed again every 5 years or so.  There may also be some possibilities of getting the pension but being allowed to work in a very different role.  So a job that included driving couldn't be continued for someone who has gone blind but they might be able to get a job using a computer instead.  It will depend on the T&Cs.

Good point but he has a defined contribution pension as he works for a private company.  He could agree some sort of overall settlement but he would need a lawyer to do that.