Executive Income Protection Insurance

Executive income protection is a policy that pays a continuing income if an employee – often a director or senior staff member – is unable to work because of illness or injury. The business holds the policy and pays the premiums, and the benefit is paid to the company to fund the employee’s sick pay.

How executive income protection differs from personal cover

With a personal income protection plan, the individual arranges and pays for it themselves. With executive income protection, the business is the policyholder, meets the cost, and receives the benefit to pass on as salary. For company directors this can be a tax-efficient way to provide long-term sick pay, and premiums are often treated as an allowable business expense – something to confirm with your accountant. For company directors looking for specialist protection, read our comprehensive guide on whether director income protection is tax deductible and how director income protection payouts are taxed.

What it covers

• A regular income if the insured person cannot work due to illness or injury, typically a percentage of their earnings.
• A deferred period you choose, after which the benefit starts.
• Optional extras such as covering employer pension contributions and National Insurance.

Who it suits

It is especially useful for small and owner-managed companies, where a director’s illness would otherwise mean no income and added strain on the business. It also helps businesses offer a valued benefit to retain senior staff.

Setting it up properly

The deferred period, benefit level and how the policy interacts with any existing sick-pay arrangements all need to fit together. Getting this right at the outset avoids gaps or overlaps, and keeps the tax treatment clean.

Getting advice

Independent, FCA-regulated, no-obligation advice helps structure executive income protection so it works for both the company and the individual. You can meet our team or read more about Damian Youell.

Speak to an adviser

Send a few details below and we’ll be in touch to discuss executive income protection for your business. There’s no obligation, and any advice is independent and FCA-regulated.