There are numerous benefits of having an income protection policy. In fact, many employers have group income protection insurance policies (i.e. Non-super policies) for their employees where the policy is owned and paid for by the employer and employees are automatically covered.
But did you know that an employer can also pay for income protection premiums where the policy is self-owned by your client who is the life insured/employee?
It is possible for a client to have an income protection policy where:
- The client is both the life insured and policy owner, and
- The client’s employer/company pays for his/her income protection premiums.
This is an important tip to consider particularly for those clients who are cost conscious and have a family budget under cashflow pressures.
However, there are taxation implications of this employer funded arrangement, which are summarised as follows: