To provide an employee with a monthly cash benefit in the event he/she is:
The benefit can provide financial flexibility so the individual can be cared for in a manner desired by them. Needs may include:
Care costs or medical expenses not covered under government plans
Payments on mortgage debt, credit card debt, or personal lines of credit
Home renovations required to make living space suitable
Replacing caregiver’s (e.g., spouse) lost income
Corporation or employee, depending upon the structure
Employee would receive the monthly cash benefit under the contract.
In the employee owned context, the employer may consider grossing up the employee benefit for the premium, for tax purposes, so the employee has no tax cost for the benefit. A Direction to pay can be used for the benefits from a Return of Premium on Death Rider only if the insured person is NOT the policy owner. In the corporate owned context, if the corporation intends to receive the Return of Premium on Death benefit (that is, does not execute a direction [or beneficiary designation in provinces that permit this] in favour of the employee) it should consider whether deducting the Rider premium is appropriate.
Carefully consider if Return of Premium on Death Rider is added to the plan.