The Executive Health Savings Plan is a concept offering critical illness coverage through a company. EHSP offers an interesting solution to businesses who wish to protect themselves against the consequences of having a shareholder or a key-person in the business suffering from a critical illness.

Click here for an example of an Executive Health Savings Plan on a 40 year old male

HOW IT WORKS

• The company and the individual jointly purchase a critical illness insurance policy.
• A beneficiary is named for each benefit on the application appendix. Both policy-owners sign this form.
• An agreement between the company and the individual outlines the premium split and any other pertinent clauses. For the insurer, there is only one payer.
• The company pays for the critical illness and death benefits. For the death benefit, it is possible for the individual to designate a beneficiary such as a spouse or children. In this case, the individual must pay the portion of the premiums linked to this benefit.The individual pays the premium for the health benefit.
• The company is the beneficiary of the tax-free critical illness and death benefits.
• If the death or critical illness benefit is not paid, at maturity (age 65), the insured receives the health benefit that equals all the premiums paid by both the company and the individual, tax-free!

Client Concerns

• It protects the company against the effects of a critical illness (when a key-person who is a shareholder becomes ill)
• It also protects the individual against the financial effects of an illnessIt fosters loyalty for key employees
• It provides competitive and comprehensive employee benefits
• The company can be used as a tax efficient vehicle