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Salary Continuation Plan (SCP)

A Salary Continuation Plan is a method of grouping individual disability insurance policies, where the premium is paid by the company and is considered a tax-deductible business expense.

»Benefits To The Employer

  • Premium contributions are tax-deductible
  • A stable and predictable business expense
  • May help attract and retain key employees
  • Help avoid the cost of continuing salary payments for a disabled employee
  • A group premium reduction may be available if three or more employees apply together

»Benefits To Employee

  • Quality individual non-cancelable disability coverage
  • No premium payment while under the Salary Continuation Plan
  • Portable coverage Return of premium benefit goes to the employee

»The Cost Savings

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It is generally less expensive for the employer to pay the premium under a Salary Continuation Plan than it would be to increase the employee’s income to allow him or her to pay the premium on a personal policy. Annual net savings with a Salary Continuation Plan for a 40 year old male non-smoker can be about $600.

Salary Continuation Plans are great for critical illness as well. The benefits to the employer are the same as above although the benefits to the employee are slightly different as the benefit may be tax free and the premium paid is non-taxable income to the employee. For further information and advice contact Wise Financial Group Inc. toll free 1-877-779-4731 or email info@companybenefits.ca.

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