Flexible benefits are normally split into two parts, core and non-core.
Core benefits are funded by you and cannot be de-selected. Minimum levels may be set - sometimes this will reflect a condition we’ve agreed with you when the policy is arranged.
Core benefit premiums can be calculated using a scheme specific unit rate applying to all employees, adjusted month by month as the membership changes.
Non-core or flexible benefits
Non-core or flexible benefits are offered to employees either as additional benefits or as a top-up to core benefits. Scheme rules govern when and by how much an employee can make changes to each benefit - a process referred to as ‘flexing’.
Changes can usually be made at:
- the annual renewal date (also called the annual enrolment date); or
- a ‘lifestyle event’ (see below)
Non-core or flexible benefit premiums are typically calculated with scheme specific age-related rates. As with core benefit premiums, they’re adjusted monthly.
Our flexible group protection products
We normally apply the following:
|Group Life Assurance||Dependants' pensions||Group income protection||Group critical illness cover|
|Minimum membership||100||100 (waived if combined with group life)||100||100|
|Minimum individual core benefit||1 x salary (or £10,000 flat rate)||15% salary||40% salary||1 x salary (or £10,000 flat rate)|
|Maximum individual benefit||12 x salary (we can consider a higher limit depending on individual circumstances)||No set maximum||80% salary (reduced if employee pension contributions insured)||Lower of 5 x salary or £500,000|
|Flex' step size||1 x salary||% of salary or prospective pension, as agreed||% of salary, as agreed*||1 x salary|
|Max step increase||1 or 2 steps, as agreed||1 step||1 step||1 or 2 steps, as agreed|
- Increases in benefit (‘flexing up’) may occur at the annual renewal date or following a Lifestyle Event subject to any policy limits.
- Decreases in benefit (‘flexing down’) can take place at any monthly accounting date by any number of steps.
- On joining the scheme (or on the date flexible benefits are introduced) employees select any level of cover between the minimum and maximum, for each benefit.
- *Our Multiflex Group Income Protection (GIP) product allows both the amount of benefit and the length of payment term to be ‘flexed’. An extension of the payment term counts as one ‘step’.
- We apply the medical ‘free cover limit’ to the combined core and non-core benefit. A pre-existing condition exclusion applies to all critical illness cover.
‘Lifestyle events’ are a defined set of circumstances which could impact the employee’s benefit needs. When a ‘lifestyle event’ occurs, the employee can change their level of benefit from the next monthly accounting date, rather than wait until the next annual renewal date.
Standard ‘lifestyle events’ are:
- marriage or registering a civil partnership
- birth of a child
- adoption of a child
- death of a dependant
- divorce or dissolution of a registered civil partnership
Additional ’lifestyle events’ may be considered.
Following a ‘lifestyle event’ changes to benefit levels must usually be completed within two months.