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Flexible Group Risk Benefits.
Flexible Benefits were introduced to the UK in the 1980s in recognition of employees' differing needs and circumstances during their working lives. A package or menu of employee benefits provided by an employer offers employees the opportunity to tailor their benefits package to meet their own needs.
Easier deployment, greater choice and increased cost efficiency have all contributed to their escalating popularity in the workplace. In the 2006 GE Insurance Solutions Survey the majority of respondents indicated they had observed an increase in requests for Flexible Benefits schemes and anticipate this trend to continue, particularly due to the added value they offer employers in terms of providing staff with a tangible package of benefits to raise employee appreciation and satisfaction.
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Flexible Solutions from Unum.
As a leading provider of Group Risk solutions in the UK, Unum has created a Flexible Benefits offering that can be tailor-made to meet the needsof the workplace. The following Unum products are available as Flexible Benefits:
- Group Income Protection.
- Group Life.
- Group Dependants' pension.
- Spouse's/Partner's Group Life (lump sum only).
- Group Critical Illness (with or without spouse/partner cover option).
We may be able to include Capital Option and Pay Direct income protection policies as Flexible Benefits - cases will be considered on an individual basis.
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What Flexible Benefits can do for employers and employees.
Employers.
In the current environment of legislative change, Flexible Benefits provide the employer with a useful tool for meeting these changes in a cost-effectiveway. They also provide a way of adapting to a changing labour market and offer a route towards harmonisation of benefits following a merger or acquisition.
Employees.
Flexible Benefits allow employees to tailor their benefits to fit with their circumstances, which means that they can have a relevant benefits packagewith the same employer right through their working life.
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Administration.
Unum do not directly provide Flexible Benefit administration services, however we are happy to work with the employer or Third Party Administrator. We can also assist with regard to producing generic wording about Unum's Flexible Benefits and Frequently Asked Questions for publication on the employer's intranet site.
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Benefit Movements.
Employees have an option to increase benefits twice a year. One may be used at the policy accounting date (when the premium due for the next policy accounting period is calculated) and one following an approved Lifestyle Event, such as a member's marriage or the birth of a child. A comprehensive list of the approved Lifestyle Events we will cover is available in our Technical Summary (UP1164). The member must make the required change to their benefit level within two months of the occurrence of the Lifestyle Event.
Employees can flex down by any number of steps, but cannot decrease their benefit below the core level. Employees can only flex up by one step at a time.
Summary of available benefits and their parameters:
| |
Group Income Protection |
Group Life |
Group Dependants' Pension |
Spouse's /Partner's Group Life |
Group Critical Illness |
| Minimum lives for a new scheme |
250 |
250 |
250 |
50 (must have Unum associated GL policy insuring same employees) |
250 (50 active members if no Core benefit) |
| Minimum Core benefit |
35% of salary or 40% of salary where a deduction based upon state benefits is requested and the average salary exceeds £35,000 |
2 x salary |
20% of salary |
No minimum |
No minimum |
| Maximum benefit level |
80% of salary (including any insured employee pension fund contributions) |
12 x salary where lump sum only exists. Where DIS also exists (see below) [3]. All lump sums capped at Lifetime Allowance |
50% of salary |
Lower of £100,000 of benefit or associated employee's benefit |
4 x salary to a maximum of £500,000 or £150,000 with no salary based limitations |
| Free Cover Limit (FCL)/Automatic Entry Limit [1] |
Applies to total benefit (core and flex) [2] |
Applies to total benefit (core and flex) [2] |
Applies to total benefit (core and flex) [2] |
No FCL. Application form required on entry and increases |
AEL applies up to a total benefit of £150,000 |
| Flex step size |
> than 5% or < than or equal to 20% of salary |
1 x salary |
5% of 1/9th of salary |
Fixed amounts, e.g. £10,000 |
1 x salary or fixed lump sums e.g. £10,000 |
- [1] Automatic Entry Limit = a level of benefit which will normally be granted to an individual regardless of their state of health provided they are otherwise eligible to become a member subject to the pre-existing conditions exclusion.
- [2] Example: Core benefit is £30K, member's total benefit is £45K, FCL £40K. Medical underwriting required on £5K.
- [3] DIS pension payable Maximum lump sum that can be insured:
- 10 - 20% salary 10 x salary.
- 21 - 30% salary 8 x salary.
- 31 - 40% salary 6 x salary.
- 41 - 50% salary 5 x salary.
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Actively at Work.
Individuals must be Actively at Work for all step increases (including those due to Lifestyle Events) on the date the increase is effective.
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Claims.
The claims process for all of our Flexible Benefit products is the same as for our standard Group products, except for the requirements of evidence of Lifestyle Events, where appropriate.
For more information, call your Sales Consultant on 01306 887766.
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Unum Limited is authorised and regulated by the Financial Services Authority.
Registered in England 983768. Registered office: Milton Court, Dorking, Surrey RH4 3LZ.
Tel: 01306 887766 Fax: 01306 881394 Textphone: 01306 887784
We monitor telephone conversations and e-mail communications from time to time for the purposes of training and in the interests of continually improving the quality of service we provide.
Copyright ©Unum Limited 2009.
UP1197 10/2009
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