When providing employee benefits to your team, some may wonder what the difference is between Critical Illness and Income Protection?While both of these insurance policies are considered vital employee benefits, they are often confused to be the same thing. However, there are some fundamental differences that are important to understand for any business before you start investing in either one of these solutions for your employees.Let’s break down the key differences.How do Critical Illness and Income Protection cover work?When comparing Critical Illness vs Income Protection in terms of how they pay out, both policies work in similar ways: if someone on your team experiences unexpected illness or injury, that person will receive monetary support. The amount and dissemination of the money is what differentiates the two different policies.What is Critical Illness cover? Group Critical Illness cover provides a lump-sum payment to an individual when they get ill or injured, and their condition meets one of the several medical requirements specified in the plan. Who is covered under Critical Illness policies? Anyone with an injury or illness that meets the medical requirements outlined in their given plan and survives for 14 days thereafter is covered by Critical Illness policies. What is covered varies depending on what illnesses or injuries an employer chooses to include.What is covered under Critical Illness?Two cover options are available, Core and Enhanced. Core covers a list of 14 of the most common critical illnesses, with Enhanced covering a more comprehensive list of conditions.If you or your employees have underlying health conditions, treatment or medication, then it's important that they talk directly with the insurer to understand how their personal circumstances may impact their coverage.The full list of the 14 core illnesses covered is as follows:CancerHeart AttackCoronary Artery Bypass SurgeryStrokeHeart Valve SurgeryAortic SurgeryAngioplastyHeart TransplantMajor Organ TransplantParalysisBlindnessLiver failureLung failureKidney failureThe Enhanced benefits include an additional 17 conditions that cover nervous system disorders such as Motor Neurone Disease, Multiple Sclerosis, Parkinson’s Disease and Dementia and any condition that causes loss of hearing, speech, sight or use of limbs. Many other conditions are further covered under the Enhanced benefit and the full list can be found on our website. What is the payout for Critical Illness? When an employee makes a claim, they are often paid a lump sum of money that can range from the tens to hundreds of thousands – and in some cases, millions – depending on the plan. Plans usually cover an equivalent of an employee’s salary or a fixed sum. Once the lump sum payment is received, the employee has the power to choose where they want to use this money – whether it be for medical bills, to cover rent, or to buy groceries.What is Income Protection Cover? Group Income Protection pays out a portion of an employee’s salary on a monthly basis to keep their finances in check when they can't work due to injury or illness. This is also sometimes called “permanent health insurance” or “sick pay insurance”. Income Protection also gives affected employees support and resources to help them rehabilitate and get back to work quicker. This type of coverage can also last through to retirement if needed. Who is covered by Income Protection Insurance? Anybody who is unable to work due to any injury or illness is eligible to receive this cover. Previous, underlying conditions, however, often don’t apply. What is the payout for income protection? When an employee makes a claim for income protection, they are covered on a designated percentage of their salary on an ongoing, monthly basis – and it could last up until retirement. Usually, the amount is 75% of their normal monthly earnings. However, as inflation escalates each year, the percentage remains the same and the pay-out increases proportionately. This way, the benefit won’t be eroded throughout the years that an employee remains incapacitated. Negotiated salary changes, however, aren't included.Critical Illness vs Income Protection cover: what’s the main difference? The main difference when comparing Critical Illness vs Income Protection policies is that Critical Illness pays employees for a defined set of medical conditions in a lump sum payment format, whereas Income Protection cover will pay an employee who cannot earn an income due to illness or injury a portion of their salary on a continual, monthly basis for anywhere from 1 year to retirement age.What you should know about Critical Illness and Income ProtectionWhen considering both of these cover options, it’s important to keep in mind some main points before you invest in either one or both of these policies. As you assess your options, note the following details: Policy costs: Costs for both policies are often dependent upon the provider. The cost of critical illness cover is influenced by which illnesses/injuries you choose to include in your plan. For Income Protection, the price depends largely on the risk level of your workplace. Income Protection can sometimes be more costly. This is usually because Income Protection is more likely to be used by employees.Deferral periods: There are often deferral periods with both policies before the money is deposited into the employee’s account. With Critical Illness cover you need to survive for 14 days from the date of the diagnosis – however, you are eligible immediately once you are diagnosed with a covered illness or injury. For Income Protection, the employer often chooses the deferral period when applying for the plan.Injuries and illnesses covered: While employees must be diagnosed with a specified insured illness to receive a benefit from Critical Illness policies, Income Protection covers employees experiencing a physical or mental setback that prohibits them from completing their daily duties for at least a defined period of time (the deferred period). Why offer Income Protection and Critical Illness benefits? Not only could offering these benefits help you save money, save your employee sick days, and help your employees get better and back to work quicker – but it allows employees peace of mind and makes them feel valued and protected. Offering benefits like this are a great way to keep employees incentivised to stick around – 3/5 workers consider the best employee benefits and perks as top factors they look for in a company when applying.Purchasing both of these cover options not only protects employees regardless of their case, helps you stand out from the competition and attracts top talent, but protects your business too. The income provision gives your business financial protection from long-term absences, provides early intervention and prevention of employee health issues (reducing the risk of long-term absence). Should you invest in both policies? Both Critical Illness Cover and Income Protection are valuable benefits, and protect your employees’ financial future in the event of unexpected injury or illness. Investing in Group Insurance Protection (GIP) is great for employers if they want to improve their sick pay promises to employees. Statutory Sick Pay (the government-mandated minimum sick pay for incapacitated employees) in South Africa states that an employee who works five days per week is entitled to 30 days every 36 months. That's not enough for most people to survive.This is why GIP is such an attractive benefit for employees. Offering it helps you attract top talent, while also covering the cost of absenteeism and presenteeism of employees.As it tends to be more on the expensive side, Group Critical Illness cover (GCI) is often considered a "prestige" benefit over Income Protection. It’s usually used as a flex benefit for larger companies, and if it’s paid in full by the employer, it tends to only be offered to select groups of employees as a standard practice. Either one is relevant for different businesses with different goals – if you’re struggling to find what’s right for you, contact our experts at YuLife to find the right policy plan for your team.