Critical Illness: Corporate
Surviving a critical illness is quite common in today's advanced medical world.
Within a corporate setting the premiums are typically paid for by the company. Thus, the benefit is received by the corporation on a tax-free basis. Should the critical illness benefit then be paid to the individual, it would be subject to taxation as a dividend.
If the corporation is to use a group option, they can deduct the premium and the individual can receive the benefits tax-free. It should be noted that this policy cannot be offered exclusively to shareholders; it must be applied to a class of employees (for example, all managers).