An employer waiver is a rider benefit that can be added to an income protection benefit. It allows an employer to insure contributions that it is making in addition to a salary. An important but often overlooked point is the need to identify what the employer waiver needs to cover.

If all contributions are being paid by the employee or the group benefits are part of an inclusively costed fund this is a relatively simple exercise. If it’s the former then there is no need for a waiver (no employer contributions to insure) and if it’s the latter then the waiver just needs to equal the employer’s total contribution.

If, however, the group benefits are part of an exclusively costed fund and the employer is fitting the bill for the costs, which is normally the case, then the waiver needs to equal the employer’s contribution plus the costs. These typically include the administration costs and the cost of the risk benefits that continue in the event of a disability.

Whatever makes up the total employer contribution – remember to include them all in your employer waiver when calling for quotes.

Thank you and regards,

The TSA Team

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The facts provided are intended to assist brokers, however, you will still need to check the terms and conditions of each insurer when considering options with clients.