Industry research shows majority of employers lack a "comprehensive understanding" of group critical illness products.
The industry body – Group Risk Development (Grid) – found that only 27 per cent of employers surveyed identified the correct definition of a GCI as “a policy taken out by an employer to provide a tax-free lump sum to an employee on the diagnosis of one of a defined list of serious conditions or on undergoing one of a defined list of surgical procedures”.
The study found some employers thought a GCI policy paid out a regular income, rather than a lump sum. Others thought it was simply to cover expenses accrued as a result of this illness.
Worryingly, a minority thought that the policy made a payout to the employer rather than the employee.
In fact, a claim can be initiated once the employee has survived a critical illness included under the policy for a specific period of time (typically 14 days) and the employee has complete freedom about how they use the pay-out.
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