Table of Contents
What is a business protection policy?
Business protection is a range of insurance policies which can help protect businesses from financial losses in the event of key people – business owners or key employees – dying, being diagnosed with a critical illness or being unable to work due to disablement.
Why do I need business protection?
Put simply, business protection helps to protect your client’s business should a director, partner, member or key employee suffer a critical illness or die. Having this financial protection in place is vital in allowing businesses to recover quickly and minimise the impact should the worst happen.
Do you put key person cover in trust?
Key Person Insurance pays a lump sum to the business if a member of staff dies or becomes critically ill. Also, the insurer pays any benefit back to the business. Given this arrangement, there’s usually therefore no need to set the policy up in a trust.
What is executive income protection?
Executive Income Protection is a type of protection for limited companies where the business owns and pays into the account. If an employee becomes ill and is no longer able to work, the company may then pay out.
What is premium Equalisation?
This is known as equalisation of premium or payment. It allows you to enter the name, percentage share, amount of cover and payment for each person and will then tell you how much each of them should be contributing in proportion to the potential benefit each will receive.
What are types of business insurances?
Five types of business insurance you should consider in addition to workers compensation
- General liability insurance.
- Product liability insurance.
- Professional liability insurance.
- Commercial property insurance.
- Home-based business insurance.
Can you write income protection in trust?
“An income protection policy is unlikely to benefit from being put into a trust but almost all policies that include benefits payable on death, and even some critical illness policies, would more often than not benefit from being written in trust.”
Is income protection insurance allowable for tax?
Income protection is a type of insurance that pays out for long term sickness. In general, the premiums are tax deductible for the employer and the payout is taxed via PAYE for the employee. This means income protection could be paid as dividend, salary or even capital distribution and across different tax years.
Is executive income protection a P11D benefit?
Is Executive Income Protection a P11d benefit? No, Executive Income Protection is not typically a P11D or benefit in kind. This means there’s no additional tax to pay as a result of taking out this cover. However should a claim arise the benefit would be taxed as income.
How is executive income protection taxed?
The benefits from the policy are paid tax free to the business and taxed as a trading receipt.