Executive Income Protection

Designed for SME businesses to offer selected employees the benefits of an extended sick pay arrangement.

Protecting businesses when an employee can’t work

Executive Income Protection is designed for small to medium-size businesses looking to offer an extended sick pay arrangement. The plan pays a regular monthly benefit to the employer that can be passed on to the employee, to help with meeting the monthly bills, in the event of injury or illness that leads to loss of earnings.

What is Executive Income Protection?

Executive Income Protection is designed for small/medium-sized businesses to provide selected employees with the benefits of an extended sick pay arrangement.


The policy is arranged and paid for by the employer (the policy owner) on the life of the employee (person insured). 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 the employee to help them meet their financial commitments.


The employer can also cover other costs (for example their employer’s National Insurance and pension scheme contributions or the cost of hiring a temporary replacement).

Who are the policies for?

The policy is primarily aimed at businesses whose employees are in a lower-risk jobs, such as office workers, or those in professional occupations (such as accountants) who wish to provide sickness benefits for these employees based on their earned income.

More about Executive Income Protection

The policy offers a choice of claim lengths and waiting periods to reflect the financial needs and circumstances of the business.


Claim lengths can range from 1-2 years or until the person insured returns to work or the policy ends.

The waiting period is the time from when the employee goes absent and the policy starts to pay. The waiting period can be aligned to the businesses current sick pay scheme. For example -waiting periods for –1, 2, 3, 6 or 12 months, or split waiting period options to suit the needs of the business.

With many providers, you can choose any amount up to 80% of annual earnings. Earnings mean the combined value of gross income paid through PAYE and the taxable value of selected non-cash benefits received as benefits in kind in the 12 months before the employee became incapacitated. Shareholding directors can take account of the dividends they receive from the company.

You can choose the age at which cover for your employee will stop – often this is known as the plan expiry date.

This can be any age up to their 70th birthday. The minimum plan term is typically 5 years.

Benefit payments start after your employee has been unable to work for an agreed period of time because of sickness or injury.

 

The deferred period options are typically 4, 8, 13, 26 or 52 weeks.

When setting up the plan you can choose how long you wish the benefits to be paid for, this is normally to a policy expiry date you have selected (such as an expected retirement age) or for a limited payment period of 2, 3 or 5 years. Benefit payments will stop earlier if the employee reaches the plan expiry date during the payment period.

Experience you can trust

Speak to us to discuss your requirements and the options available, book a call (no obligation) to speak to one of our advisers here.