Why honesty is the best policy when it comes to sick pay entitlement


Disability insurers and employers are not working hard enough at essential communications on the reality of sick pay. Using long words, jargon and acronyms only leaves people who need health and disability cover, baffled and confused with no real understanding of what sick pay insurance provides and why they need it.

sick pay

There are three key things that create this barrier. The language used by the insurance industry, euphemisms around the products and what they do, and a misconception by employees as to the sick pay entitlement they have.

We recognise that as an industry, we are part of the problem. Using complicated language rather than plain English isn’t helping. We need to use language which is easier for employees to understand to actually engage them. The term ‘income protection’ may be clear for insurance companies, but it’s too vague for employees. We prefer the term sick pay.

Let alone the fact it’s not immediately understood, people also confuse the acronyms IP or GIP with PPI (payment protection insurance), a product which has a poor reputation and which means any link to it is potentially very damaging. 

The role of employers

So although there’s lots of work for the industry to do, employers have a role too. Sitting at the centre of sick pay provision, employers are the only ones who can link up their own sick pay promises with insurance cover and state benefits, so employees get a complete picture of the cover they have.

Don’t sweep it under the carpet

Ultimately sick pay insurance is for when people suffer a health catastrophe. A situation when an employee is so chronically or acutely ill that they can no longer work for a prolonged period of time. This is serious stuff, and it needs to be treated and communicated seriously.

Yet a lack of awareness about the amount of benefit an individual can get from the State and how to access it, means that many employees assume the State or their employer will provide for them, when often they won’t. Research that we conducted last year showed that 40% of SMEs would not provide any sick pay beyond the mandatory statutory sick pay period, and a further 43% would only provide some partial salary payments.

It’s important that employees are made aware of this reality, so that they can make informed decisions themselves. Misconception benefits no one.

A duty to educate

For employers without any sort of sick pay insurance, telling employees that they will only get £88.45 a week from the State for the first of 28 weeks of absence and a similar amount thereafter, may not seem like a positive message. But the most important thing is knowledge, educating your people so that they are fully aware of the financial risks they face which allows them to make their own informed decisions.

We’d encourage employers to be open with their people and provide them with a summary of what they will pay should their employee suffer long term sickness, and what the State will provide. You may then decide to top this up with sick pay insurance, or even give your employees the option to buy extra cover themselves through a flexible or voluntary benefits scheme. 

Education itself adds value and improves awareness among employees of the very real risks they face and the support they have in place to protect against them, which can only be a positive step. It’s when they don’t know, that they’ll have a problem.

Time to start communicating the reality of sick pay

Have you ever actually told your people what they will get? Employees need to recognise the harsh reality of the gap between desired lifestyles and the benefits the State will provide, and both insurers and employers can help to reduce this gap.

Insurers’ marketing communications should focus on the reality of being left without sick pay cover and show people the value of putting this in place, while employers should be communicating with their people confidently and openly about the reality of their sick pay entitlement and how much money it actually provides.

It’s about real people and it’s about them understanding what’s in place and what they need if they become seriously ill.

This article was provided by Ellipse.



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