What forces the employers to pay for an employee's family ?

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PostPosted: Wed Apr 26, 2006 9:40 am   Post subject: What forces the employers to pay for an employee's family ?  

I have found out...that sometimes it may so happen that according to a pre-existing bond the employer gets compelled to pay the proceeds of a keyman policy to his employee's family. Are then the premiums paid by the employer deductible ? Would the proceeds be taxed ?



Jefferson.


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Jefferson
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PostPosted: Wed Apr 26, 2006 9:44 am   Post subject: The employer won't be compensated  

Hi !



Through this policy the loss of profits for the employer won't be compensated. Neither the premiums for such a policy get considered as deductible nor do the proceeds with the employer's family get taxed. This policy is mainly aimed at protecting the employee's family.

regards.

steven
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PostPosted: Wed Apr 26, 2006 10:16 am   Post subject: Employer should pay for the Add-on  

It is generally expected that whenever an employee passes away, his family members would be entitled to get certain benefits (eg. one year's salary etc.) from the organization. For this reason the employer is supposed to pay more premiums than the normal ones to contribute towards the add-on element of the employee's policy.



Now, I'd really like to know if the premiums paid by the employer deductible ? Would the proceeds of this policy get taxed ?

thanks..


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Bess
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PostPosted: Wed Apr 26, 2006 10:33 am   Post subject: There are a few exceptions..  

Over here the proceeds that the employer is supposed to get, would be taxable leaving out the proceeds received by the family members. The normal premiums would be deductible excepting the extra premiums.

carol
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PostPosted: Fri Apr 28, 2006 5:31 am   Post subject: Compensation for the dead or injured..  

hi..I have perceived that an employer might be forced by the law to compensate for an injured or dead employee anytime. Incase he uses his insurance to counter such a situation, would the premiums be considered as deductible ? And what about the proceeds from this policy ?



regards,

Richard


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PostPosted: Fri Apr 28, 2006 5:38 am   Post subject: premiums are normal business expenses.  

My friend, I'm sure that such a policy is not a keyman policy. Over here the premiums would get deducted as normal business expenses and the proceeds won't be taxed at all.

Thanks.

carol
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