Pictured: Sarah Fullaway

With the economy continuing to struggle, the subject of income protection seems to have become a hot topic, with many employees worrying about whether they could survive on state benefit of just £5,000 a year if they were unable to work due to sickness or injury.

But according to Sarah Fullaway, director of Derby-based Oviso Financial Services, a new voluntary income protection scheme has been launched to enable business owners to support their employees during these difficult times:

"In a recent survey conducted by The Guardian newspaper, more than 5,000 UK workers were questioned about their current working life.

"The survey revealed that fewer new jobs, even fewer pay increases and longer working hours has created a rather gloomy UK workforce, whose main concern is how they would fund their outgoings in the event that illness or injury left them unable to work.

"Having recently joined forces with The Guardian newspaper to help raise public awareness around the lack of state benefits for sickness and accident, Unum, one of the world's leading benefits providers, is now leading the way in the group income protection market by offering a new proposition for businesses that want to offer their staff various benefits, but cannot afford to pay for them exclusively.

Income Protection (IP) normally pays out an income of up to 70% of a person's gross annual earnings if they are unable to work due to sickness or accident. 

This is normally paid after a deferment period, decided by the employee (normally when sickness benefits stop) and continues to be paid until they return to work, the policy ends or you reach retirement.

Unlike a critical illness policy where the illness has to be from a specified list, IP pays out if you are unable to work for any illness or injury. 

So, if an employee was involved in a car accident and suffered multiple broken bones or a minor head injury, they might not be classed as "critically ill"; however they would still require time off work to recover and rehabilitate.

IP has the edge over a critical illness policy in this situation because, providing the doctor signs to say that an individual is unable to perform their job, the IP policy will pay out. Under the same circumstances, it is unlikely that you would be eligible to claim on a critical illness policy.

Unum's campaign aims to educate the public about the consequences of not having aback-up plan should you be unable to work due to sickness or accident. 

Historically, income protection has been arranged in two ways; either by the individual themselves, or in a Group scheme set up by an employer.

Group Income Protection is paid for by the employer on behalf of its staff, to ensure that their valued employees continue to be paid, should the worst happen. This is a fantastic benefit for those employees who are covered; however it's fair to say that in the current climate many employers simply cannot afford to cover everyone within the business. 

To help fill this gap, Unum has launched its Select Income Protection proposition. This unique contract gives employers the opportunity to set up a Group scheme that does not require the employer to solely pay the monthly premium. The employer can choose to pay the full premium if they so wish, or they can, for example, pay 50% of the cost and the employee then pays the remaining 50%.

If an employer simply cannot afford to meet any of the cost, but wishes to offer this as a benefit to their staff members, employees can simply pay for the cover themselves. The benefit of this is that Group schemes generally cost less than if you bought a plan as an individual.

This new concept gives employers more flexibility around staff benefits, with minimal hassle. Employees get very competitive income protection, whilst the employer is offering a valuable benefit to its staff.