The benefit is payable should an employee/director become unable to work due to accident or illness which resulted in a loss of earnings.

Up to 80% of the employee’s pre-incapacity earnings and dividends, as well as the option to include the employers NIC’s and pension contributions. You can also cover a spouse or registered civil partner’s gross earnings and or dividends (that would stop in the event of the employee being unable to work due to illness or injury).

The person covered must be an employee of a UK business, which can include salaried company directors. The product is designed to predominantly cover employees of Limited Companies. There are some scenarios where insurers may consider cover for dividends only.

Based on our current understanding of the tax rules that apply which could change in the future. The premiums that you pay will not be treated as a P11D expense for the employee.

In the event of a claim, the benefit would get paid tax free into the company. However when the company pays the benefit to the employee, standard tax rules apply.