Category: Group income protection · Reviewed by Jake Leat, Associate Director · Last reviewed 2026-06-10
Group income protection benefit ceases automatically on the earliest of: (i) the employee’s return to work; (ii) attainment of the scheme cessation age (typically state pension age); (iii) the employee’s death; (iv) expiry of the policy’s limited payment term, where one applies; or (v) on review, where the employee no longer satisfies the incapacity definition.
Category: Group income protection Also known as: Termination of GIP benefit Related concepts: Group IP definitions, Group income protection benefit, Suited occupation group IP
Cessation is determined by the policy wording. Modern policies normally provide for periodic medical review (commonly annually) at which the insurer reassesses whether the employee still satisfies the incapacity definition. Where benefit ceases on review, the insurer must follow a documented process and the employee has rights of appeal internally and ultimately to the Financial Ombudsman Service.
Cessation must be operated consistently with the insurer’s obligations under the FCA Handbook (ICOBS, PRIN 2A) and with the employer’s obligations under the Equality Act 2010 to make reasonable adjustments before dismissing the employee on capability grounds. Where benefit ceases because the policy defines a two- or five-year switch from own occupation to suited or any occupation, the employee must be told in advance.
Limited payment term cover (e.g. five-year cover) has grown materially in market share over the last decade. It substantially reduces premium but caps the protection horizon at, typically, five years per claim — after which an employee who remains incapacitated has no further benefit.
An employee aged 58 has been on GIP claim for four years under a limited five-year cover. The insurer notifies the employee and the employer twelve months in advance that benefit will cease at the five-year point. The employer and insurer’s rehabilitation team work on the case to maximise the chance of return to work before benefit termination; if return is not achievable, the employer’s HR and OH team review the position under the Equality Act 2010, including consideration of ill-health retirement on the employer’s pension scheme.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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