Incomeguard   |     home Accident Sickness & Unemployment   |   Permanent Health Insurance (PHI)   |   Critical Illness   |   Life Assurance   |   Private Medical Insurance (PMI)   |   Corporate / Group Income Protection Corporate / Group Income Protection This kind of insurance is designed to provide a replacement income if illness or injury prevent someone from working for a long period of time. Mostly it is used by an employer to finance an entitlement to occupational sickpay which arises out of the contract of employment issued to their staff. It is possible for the employer to insure pension contributions and NI contributions in addition to the basic income benefit. Benefits become payable after the end of that waiting period which is known as the deferred period. Typically this will be about 6 months but longer or shorter periods are available. The emphasis for providing such cover is currently considered to be moving from merely providing a benefit to offering a valuable absence management tool via rehabilitation services. Tax issues The employer gets corporation tax relief on premiums. Benefits are paid to them to be forwarded to the employee through their payroll system. The employees pay income tax and NI contributions on the occupational sickpay they receive and they do not incur any P11D tax liability. With partnerships, benefit payments are generally not taxable and premiums are not deductible. The insurance benefit becomes payable when the member has been ill for some while . Indicative costs These vary enormously according to type of occupation and previous claims experience. A scheme paying a benefit 75% of gross salary after a six month deferred period (typically standard terms) could cost a modern telecoms company with no previous claims history 0.5% to 0.7% of gross payroll rising to 1.5% to 2% for a firm of "blue collar workers"    For further information on this service please e-mail us  fredw@clara.net      Copyright FTW(IFA) Ltd Nov 2002