Private medical cover gets the headlines, usually followed by cash plans, gym discounts and wellbeing apps. Financial protection sits further down the list, even though it’s often the benefit people need most when life takes a hard turn.
That’s the gap a recent Ciphr webinar, The benefits leader’s guide to financial protection, set out to close.
Mike Hesch, head of employee benefits at Engage Health Group, and Niall Munro, director of benefits sales at Ciphr, talked through why protection gets overlooked, how life assurance, income protection and critical illness cover work in practice, and how to build a business case that gets signed off. Here’s what benefits leaders need to know.
Why financial protection gets overlooked
During the pandemic, health benefits took the spotlight. Private medical insurance and cash plans became the default focus, and income protection dropped down the list. Many employers now have solid health cover in place, but offer little to nothing for the family of an employee who dies, falls seriously ill or can’t work long term. That’s a gap worth closing. Life assurance and critical illness policies increasingly come with valuable extras built in at no extra cost, and plenty of employers don’t realise they already have them.
Three types of cover, three different functions
1. Life assurance
Life assurance is usually the cheapest and most valued place to start. It pays a lump sum, typically a multiple of salary, to an employee’s family if they die. It’s easy to understand and it prices well, which makes it a strong first step for employers building out protection.
2. Income protection
Income protection replaces a percentage of salary if an employee can’t work long term because of illness. Most policies also fund support to help people get back to work, which benefits the employer and the employee.
3. Critical illness cover
Critical illness cover pays a lump sum if an employee is diagnosed with, and survives, a listed condition. The value sits in the detail. Core cover usually includes cancer and heart conditions, but insurers often add extras like hearing loss, which are easy to miss and easy to forget you’re covered for.
Offer it to everyone, not just who asks
Employers sometimes want protection to be voluntary, or limited to directors. This approach rarely pays off as insurers price “all staff” cover far more competitively because there’s no risk of selection against them. All-staff cover usually works best. Insurers price it more competitively because the risk is spread across the whole workforce. If cover is voluntary or limited to directors, only people who are more worried about their health tend to opt in. That pushes the price up, not down.
A flexible benefits platform like FlexGenius solves this tension. Set a baseline for everyone, say four times salary, then let employees who want more (perhaps after a house move) top up themselves through salary deduction.
Making the business case for financial protection benefits
Three ways to build a case that lands:
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Start with what your organisation values, not the price tag. What’s your position on wellbeing? Is retention a problem? Benchmarking data on what competitors already offer is often the single most persuasive input into a business case.
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Frame protection as an investment in resilience, not a cost. A CFO responds very differently to “we need to spend more on benefits” than to “here’s what this gives us back.”
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Once the case is made, check the detail. Work out who needs cover, what it might already replace (a paid-for Employee Assistance Programme (EAP) could be duplicated by one built into a life assurance policy), and what different providers offer for the money. The extras vary between insurers, and the cheapest quote isn’t always the best value.
Why communication makes or breaks financial protection benefits
Many of the policies we’ve covered comes with extras: an EAP, bereavement support, sometimes counselling. None of it helps if nobody knows it’s there.
“Communication is key, so employees understand what they’re covered for and, probably more importantly, what they’re not. That’s where a lot of the historic critical illness negativity has come from, people saying ‘I thought I was covered.’ Keeping communications clear and in plain English helps employees understand what insurers are actually offering.” - Niall Munro, director of benefits sales at Ciphr
The fix is simple and needs repeating. Explain clearly what’s covered and what isn’t, then say it again. Monthly updates, short videos and plain English guides help employees know what’s available, how it helps them and how to access it. A platform like FlexGenius does this for you, with employee communications tailored to the right people at the right time.
One size won’t fit every workforce
A younger team without mortgages may value income protection more than life assurance. A team with families and property may see life assurance as essential. Look at your workforce, ask what your people worry about, and let that shape what you lead with.
Three places to start:
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Check what you already have, and what it might duplicate (a standalone EAP versus one built into a life assurance policy, for example).
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Get benchmarking data on what similar employers offer, to support your business case.
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Plan your communications rhythm before launch, not after.
Want to see how FlexGenius could help your organisation get financial protection right? Our specialists are here to help.
