Group Death in Service
In order to attract and retain key employees many employers are now looking at a flexible benefit package rather than purely higher salaries. Tax benefits that might be of interest are outlined below.
The death of an employee whilst in the service of the company can present the company with a dilemma. Whilst they may wish to make some form of payment in recognition of loyalty or long service, the financial implications to the company may prevent them from doing so.
Group Death in Service cover is one of the cheapest methods of providing high levels of life assurance cover for employees, with benefits being payable on death whilst in service with the company.
The policy is normally written under pension scheme rules, thus allowing tax relief on premiums. However, benefits are payable in full and without liability to tax on either the company or the beneficiaries.
Group Income Protection
Group Income Protection (PHI) enables Employers to continue paying employees after a defined deferred period whilst off work due to sickness or disability. The claim continues to be paid until the individual recovers, retires or dies.
Premiums are paid by the company and are generally tax deductible against Corporation Tax.
The cost of cover is dictated by three factors, the occupation of the individual, term to State Pension Age and the deferred period selected. The deferred period is the initial period during which a claim for benefits will not be allowed. This is normally 13, 26 or 52 weeks. The longer the deferred period selected, the lower the cost of cover.
In the event of a claim, once the deferred period has expired, benefits will be paid until the claimant returns to work or reaches their State Pension Age.
If either of the above benefits are of interest please get in touch with Sue Stephens as we can recommend several local financial advisors who are able to source competitive rates.
