IHERB

Ill health early retirement benefit

Designed to help companies de-risk, budget and plan ahead for the unpredictable liability of early retirement payments if a pension scheme member retires early due to permanent ill health.

A lump sum payment is made to the trustees of the pension scheme for each valid claim. The pension scheme trustees arrange for the ill health pension payments to be made to the member.

Key documents

Ill health early retirement benefit technical guide (1.2mb pdf)

Product details

For policies of 100 active members or more


Who can be insured?	Active members of the pension scheme. Employees must join the pension scheme as soon as they are eligible. For cover, members can be grouped into separate categories and there can be different benefit basis between categories.
What’s the maximum amount covered?	£2 million or the strain cost to the pension scheme if that is lower. The strain cost is the extra cost to the pension scheme as a result of the member retiring early due to ill health. You can also partially cover the strain cost as an option.
How long does cover last?	Cover for a member of the pension scheme ends when a payment has been made following a valid claim. The benefit will usually end at the normal pension scheme age under the pension scheme rules. Alternatively, it can be age 65 or the state pension age. If a member is absent due to illness or injury, we’ll continue cover up to the benefit end date. If a member is absent for another reason, such as a sabbatical, we’ll continue cover for up to one year or when they return if sooner.