Executive Income Protection
Executive income protection will protect your income in the event of suffering an accident or illness that prevents you from doing your job. The policy is arranged on a ‘life of another’ basis, meaning that it is owned by the company and therefore can be paid as a business expense.
Executive income protection is popular with contractors and directors alike who are working through their own limited company, who have little or no sick pay entitlement if they become too ill or injured to work.An executive income protection policy is designed to help cover your regular financial commitments, such as mortgage, rent, food and day to day utility bills.
The policy can pay out from as short as 4 weeks of illness or injury and your earnings can be protected right up until your expected retirement age.
What Does Executive Income Protection Cover?
Executive income protection is designed to pay out if you can’t do your specific job as an executive/company director. The policy will protect you against any medical eventuality that prevents you from doing your job, including accidents, bodily injuries, illness and period of sick leave.
What Doesn’t it Cover?
As with all insurance policies, there will be some automatic exclusions to be aware of. These will include:
- Self-inflicted injuries
- Illness or injuries that occur in pursuit of criminal acts
- Illness or injuries that occur as a result of alcohol or substance abuse
- Illness or injuries that occur as part of travel to countries with political instability
What Benefits Can an Executive Income Plan Provide?
There are many benefits that an executive income protection plan can include, such as:
- Cover can go up to age 70 in most cases
- The maximum cover available will be up to 80% of gross earnings
- A maximum initial benefit of £300K per annum may be available
- Guaranteed premiums that don’t change
- Cover other costs to the company, such as employer National Insurance contributions payable in the event of incapacity and the cost of some or all of the employer pension/life assurance premiums.
How Does A Claim Work?
When a claim is made, the benefit is paid directly to the business, which may use the money to provide an employee or director with a replacement of pay due to being off work with sickness or injury. The business would then pay the benefit to the employee in question through the normal methods, and they would therefore pay personal tax on the gross income, along with relevant National Insurance contributions.
There are many policy types and requirements to bear in mind, so it’s important to obtain advice from an expert advisor when setting up an executive income protection policy. At Contractor Protection, we have access to a large network of trusted insurance providers who can provide comprehensive cover for our clients.
Contact Contractor Protection Today
Mitigate the risk of your income stopping immediately by obtaining an executive income protection policy which will preserve your current standard of living. These policies will provide you with a steady income until you are able to get back to work or until retirement for more serious illnesses or accidents.
Contractor Protection selects companies that have a proven history of paying claims. Refusal of claims can be financially devastating, and so you should pick a company that can prove their claim rate.
To find the best executive income protection policies, contact Contractor Protection today.
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