Executive Health Plans: Critical Illness Coverage Through Your Company
If you or a key person were diagnosed with cancer, a heart attack or a stroke, the business would feel it too. An executive health plan uses critical illness insurance, arranged through the company, to put money in place at diagnosis, so the person can focus on recovery and the business can keep moving.
How it works
The business arranges critical illness coverage on an owner or key employee. If they're diagnosed with a covered condition and survive the waiting period, the policy pays a lump sum. Depending on how the plan is set up, that money can help the business cover the person's absence, bring in temporary help, or support the person directly while they recover.
Adding return of premium
Many owners worry about paying premiums for years and never making a claim. A return of premium option means that if no claim is made, some or all of the premiums can be refunded, under the conditions set out in the policy. For a business, that changes the conversation from "money we'll never see again" to coverage that pays at diagnosis, or returns premiums if it's never needed, as long as the policy's conditions are met.
Shared ownership: splitting the policy between you and the company
One popular design splits ownership. The company owns the critical illness coverage and pays that part of the premium, while the individual personally owns and pays for the return of premium portion. If there's a claim, the company receives the benefit. If there's never a claim, the premium refund goes to the individual.
It can be an attractive way to share both the costs and the benefits, but the tax treatment depends on exactly how it's structured, and not every aspect has been addressed by the Canada Revenue Agency. That's why we only design these plans together with your accountant.
Who it's for
- Owners of incorporated businesses
- Key employees the business depends on
- Professionals with their own corporation, such as dentists, physicians, accountants and lawyers
- Businesses that want a meaningful benefit to help attract and keep their top people
Frequently Asked Questions
Protect your people at diagnosis
Book a call and we'll walk through how a plan could work for your team. My name is Trevor, and I'll keep the structure simple enough to explain at the kitchen table and solid enough for your accountant.