Group Critical Illness is, relatively speaking, the newest and fastest growing of the group risk insurances (employer-sponsored life assurance, income protection and critical illness) but research*from industry body GRiD indicates that employers may lack a full understanding of the product. Only 27% identified the correct definition of Group Critical Illness (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’.
Some employers wrongly believe GCI will pay an income (rather than a lump sum) to employees whilst they have a serious illness, or is simply to cover expenses as a result of the illness and others thought the policy paid out to the employer instead of 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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