What is Executive Income Protection?

It is a cover that businesses can put in place for employees (including Directors) to ensure those covered under the plan can maintain their lifestyles if sickness or illness prevented them from working.

This type of cover differs from personal income protection as it can cover more than just income. It also provides options to cover employer pension and National Insurance contributions too.

What is the impact on a director or employee in the event of a long-term absence through illness or injury?

Whether you are a director or an employee of a business, the income you receive is likely to be crucial for you to maintain your lifestyle.

For example, if you are a Director of your own business you will likely be drawing income from it and in the event of a long-term absence, you may find that it becomes difficult for your business to support what you need. This may be through you being unable to generate future income due to your absence, or through the lack of funds held within the business to provide your income. These issues could put your business and future lifestyle at serious risk. 

A similar scenario could apply to a key employee where your business would want to continue paying that individual in the event of a long-term absence, but for several reasons it could become impossible for you to continue paying their wages. Again, this individual would be at risk of not being able to maintain their lifestyle. Importantly for the business, you may have to fund the cost of operating without this key individual, and/or employing additional resource or outsourcing the role to an external party.

How can Executive Income Protection help?

Executive Income Protection can give you and your business the breathing space and security needed during a time of instability and uncertainty.

The protection ensures that in the event of injury or illness that leads to loss of earnings, the plan pays a regular monthly benefit to the employer that can be passed on to you or the employee to help meet ongoing financial commitments, and allows the business to operate effectively.

This type of cover provides an extensive range of benefit options including:

  • Cover based on the executive’s occupation.
  • Cover of up to 80% of the employee’s gross earnings.
  • The option to cover employer National Insurance contributions and any pension/life insurance premiums paid in relation to the insured person.
  • Lower cost options with a choice of 2-, 3- and 5-year benefit payment periods.
  • Waiver of premium: No premiums payable if benefits are paid.
  • Flexibility – the benefit is paid directly to the employer, so it can either be passed on to the employee through PAYE or retained to support the business.

Get in touch

If you would like to discuss your business needs and how this type of cover can provide security for you and your business, please get in touch by completing the form below.