I’m thinking about taking out an Income Protection policy. I can’t seem to find any information about how I pay tax on the benefit if i make a claim?
Income Protection payouts are generally tax-free. For personal policies, as you pay for the premiums yourself from your net income then the policy has already effectively been taxed. This is why most insurers generally only allow you to insure 65% of your gross income as it works out as approximately the same as your net income.
Some company directors pay for their income protection premiums via their business. This is known as Executive Income Protection.
Here, the business pays the premiums and they’re usually a tax-deductible business expense. This means the policy hasn’t been taxed at the payment stage and so is generally taxable as income on a claim. Benefits will be paid back into the business as the company owns and pays for the policy and on distribution from there to the individual insured will be taxed accordingly.
We would recommend you speak to your tax adviser or accountant for advice to ensure you are clear on any tax implications.
If you are considering a setting up Income Protection whether personally or through your business please do not hesitate to pop us a call on 02084327333, we are here to help.
Why Speak to Us…
We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to let us help.
- There is no fee for our service
- We are independent and impartial
Drewberry isn’t tied to any insurance company, so we can provide completely impartial advice to make sure you get the most appropriate policy based solely on your needs.
- We’ve got bargaining power on our side
This allows us to negotiate better premiums for you than you going direct yourself.
- You’ll speak to a dedicated expert from start to finish
You will speak to a named expert with a direct telephone and email. No more automated machines and no more being sent from pillar to post – you’ll have someone to speak to who knows you.
- Benefit from our 5-star service
We pride ourselves on providing a 5-star service, as can be seen from our 3183 and growing independent client reviews rating us at 4.92 / 5.
- Gain the protection of regulated advice
You are protected. Where we provide a regulated advice service we are responsible for the policy we set-up for you. Doing it yourself or going direct to an insurer won’t provide this protection, so you won’t benefit from these securities.
- Claims support when you need it the most
You have support should you need to make a claim. The most important thing when it comes to insurance is that claims are paid and quickly. We are here to support you during the claims process and make sure it’s as smooth and stress free as possible.