Sickness disability and unemployment insurance: tax treatment from 6 April 1996: main rules: qualifying risks and qualifying periods
Qualifying health or employment risk: ITTOIA05/S736
A qualifying health or employment risk is a risk that the insured person would in thefuture
- suffer from any physical or mental illness, or deterioration in an existing condition, as may be specified in the policy, or
- cease to be employed or self employed due to circumstances as may be specified in the policy.
The risk relates to what was specified in the policy, not to what actually happened tothe insured person.
Qualifying period for which payments may be made: ITTOIA05/S737
Payments are only exempt if made in respect of one or more of the following periods
- the period throughout which illness etc continued, including convalescence
- the period throughout which unemployment continued
- the period throughout which there was a reduction of income, ignoring payments received from the policy - this includes a period after the person has returned to work but continues to receive payments from the policy because their pay is lower than it was before the absence
- where any of the above periods ended with the death of the insured person, a further period of time immediately following the death.
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