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Executive Income Protection

This type of policy pays out a regular monthly benefit should the insured key employee or director become too ill or injured to work. It is popular with contractors and directors working in their own limited company and covers up to 80% of their income (wages or dividends) in a tax-efficient way. Read more

Executive Income Protection operates in a very similar way to Personal Income Protection, providing a regular income if the person insured is unable to work due to illness or injury.

The main difference between the two types of policy is that Executive Income Protection can cover up to 80% of the individual's income, whether from wages or dividends or both, whereas most standard policies typically only cover up to 60%.

As such, it is an attractive benefit for high-earning small business owners and contractors.

The cost of the premiums is determined by how much cover is required, the age of the individual to be covered, any existing or past health conditions, what their current role entails, how long the cover is to last, and how long they are prepared to defer the first payment.

The premiums are paid by the company and are tax-deductible, which is an additional saving compared to personal policies.

Along with other benefits available, Executive Income Protection can be a valuable component of an overall financial plan, especially those with high incomes and significant financial responsibilities.

Free Quote

Relevant Life Cover

This type of policy can provide a complete tax-free solution to life insurance for company directors where both the premiums and the lump-sum payment in the event of a claim are tax-free. The premiums are not classed as a benefit-in-kind and, if the policy is written into a discretionary trust, then any payout is not subject to inheritance tax. Read more

If you’re a company director and you have life insurance in place to protect your family, you could be paying more tax than you need to.

Relevant Life Policies are a way of providing death-in-service benefits on an individual basis no matter how small your business is. They are not classed as a ‘benefit in kind’ so no tax is payable on the premiums. In most cases the benefits can be paid free of inheritance tax provided the benefits are payable through a discretionary trust.

What are the benefits?

  • Although the company pays the premiums, they are not normally assessable to income tax on the employee as a benefit-in-kind. This can be a significant saving, particularly for a higher-rate taxpayer
  • Unlike a registered group scheme, the benefit will not form part of the employee’s annual or lifetime pension allowance

What are the advantages of using a discretionary trust?

  • There are restrictions as to whom the benefits of a Relevant Life Policy can be paid, but the use of the trust is the most practical way of ensuring these restrictions are met. The beneficiaries who could be included are usually family members and dependents.
  • Having benefits paid through a trust ensures they cannot be taxed as part of the company’s trading income, nor do they form part of the company’s assets.
  • The trust is discretionary, allowing trustees to be flexible as to whom they pay benefits. However the employee can advise the trustees of his or her intentions by completing a nomination form. Although this is not legally binding on the trustees, it helps to guide them. The trustees will normally be the directors of the company.
  • Using a trust also ensures that in most circumstances benefits are paid free of both income tax and inheritance tax.
  • The maximum cover differs across insurers: for example, Bright Grey offer a figure up to 15 times the employee / director’s remuneration. This can include salary, regular dividends paid in lieu of salary and any benefits in kind.

Are there any limits to the cover I have?

  • The legislation does have some limits to qualify for the tax concessions, and to ensure these are met, it requires that:
  • The cover must be paid in a single lump sum before the age of 75.
  • Only Death & Terminal Illness benefits can be provided.
  • Benefits must be paid through a discretionary trust.
  • Beneficiaries are normally restricted to family members and dependents.
  • The maximum amount of cover allowable can depend on your remuneration and age.

Who are relevant life policies suitable for?

  • Company Directors that would like their company to pay for their life cover and offset the premiums against corporation tax
  • Small businesses that do not have enough eligible employees to warrant a group life scheme.
  • Directors of small limited companies that may be thinking of putting Key Person cover in place so that their company can pay the premiums on their cover
  • High-earning employees or directors who have substantial pension funds and do not want their benefits to form part of their lifetime allowance.
  • They are not suitable for the self-employed or equity partners, although their employed staff could be covered.

Free Quote Calculate your cover

Key Person Insurance

This type of policy protects businesses financially if a key individual within the business (typically a company director) dies or can no longer act in any capacity with immediate effect in the event of serious illness. It is often required by lenders to cover the full repayment of a loan. It is an important consideration for many small and medium-sized businesses. Read more

Key Man Insurance or Key Person Insurance is essentially a form of life insurance for businesses. It is generally taken out by a business to compensate for financial losses that would arise from the death or extended incapacity of the key individual(s) of the business specified in the policy, and in turn ensure the continuity of the business.

There are generally three categories of loss for which Key Man Insurance can provide compensation:

  • Protect losses related to the extended period when a key person is unable to work by providing temporary personnel and, if necessary, financing the recruitment and training of a replacement.
  • Protect profits such as offsetting lost income from lost sales or contracts; or losses resulting from the delay or cancellation of any business project that the key person was involved in; or loss of opportunity to expand, loss of specialised skills or knowledge.
  • Protect business & director loans, overdrafts or investments. The value of insurance arranged can be used cover their repayment in full, or to assist in generating continued profit (as above) to help make any monthly payments.

As a result, a Key Man or Key Person can be anyone directly associated with the business whose loss can cause financial strain to the business. For instance, they could be a Director of a company, a Partner, key sales people, key project managers and people with specific skills or knowledge which is especially valuable to the company.

Free Quote

Can’t decide?

For free advice, speak to a UK based adviser on
0333 987 3960* (9am-5pm Mon-Fri)

The telephone service is provided in partnership with BQI Protection Ltd and the quotation service is provided by an FCA-authorised insurance specialist

What is Executive Income Protection?

Executive Income Protection is a type of insurance policy that provides a regular income to a business if a key executive or employee is unable to work due to illness or injury. This ensures that the business can continue to meet its financial obligations and maintain stability during the absence of a crucial team member.

Get a FREE Executive Income Protection Quote

Need Help?

For expert advice, speak to a UK-based adviser on
0333 987 3960* (9am-7pm Mon-Fri)

Our team of experienced advisers can help guide you through the options and provide access to the best deals in the market.

Key Features of Executive Income Protection?

  • Income Replacement: Provides a monthly benefit to replace a portion of the executive's income up to 80% of their gross salary.
  • Tax Efficiency: Premiums are usually tax-deductible as a business expense, and benefits are paid tax-free to the business.
  • Flexible Benefit Periods: Policies can be tailored to provide benefits for a specific period, such as 1, 2, or 5 years, or until retirement age.
  • Deferred Periods: Businesses can choose a deferred period (waiting time before benefits start) that aligns with their financial planning, typically ranging from 4 weeks to 52 weeks.
  • Own Occupation Definition: Ensures that benefits are paid if the executive is unable to perform their specific role, even if they could potentially do another job.

Benefits of Executive Income Protection

For the Business

  • Financial Stability: Ensures continuity of income for the business, helping to cover ongoing expenses and maintain cash flow.
  • Employee Retention: Demonstrates a commitment to the well-being of key employees, enhancing loyalty and retention.
  • Tax Advantages: Premiums are often tax-deductible, and benefits are received tax-free.

For the Executive

  • Income Security: Provides peace of mind knowing that their income is protected if they are unable to work due to illness or injury.
  • Customisable Coverage: Policies can be tailored to meet the specific needs and circumstances of the executive.

Get a FREE Executive Income Protection Quote

How Executive Income Protection Works

  • Policy Setup: The business takes out a policy on behalf of the executive, paying the premiums.
  • Premium Payments: Premiums are paid regularly, and are tax-deductible as a business expense.
  • Claim Process: If the executive is unable to work due to illness or injury, the business can make a claim after the deferred period.
  • Benefit Payment: The insurer pays a monthly benefit to the business, which can be used to cover the executive's salary or other business expenses.

Considerations When Choosing a Policy

  • Coverage Amount: Determine the appropriate level of coverage based on the executive's salary and the financial needs of the business.
  • Deferred Period: Choose a deferred period that aligns with the business's financial reserves and cash flow requirements.
  • Benefit Period: Decide on the length of time benefits will be paid, considering the executive's role and the potential impact of their absence.
  • Policy Exclusions: Understand any exclusions or limitations in the policy, such as pre-existing conditions or specific illnesses.

Get a FREE Executive Income Protection Quote

Tax Implications

  • Premiums: Generally tax-deductible as a business expense.
  • Benefits: Paid tax-free to the business, providing a clear financial advantage.

Now’s the time to protect your loved ones...

A British Life Company

Get Insured within 20 Minutes

It is possible to be protected with a life insurance or critical illness policy within 20 minutes provided the insurer does not require a GP report or medical.

A GP report or medical is normally required for large amounts of cover (over £400,000), or if your BMI is over 30, or you have any significant ongoing or past medical issues, or if you are involved in dangerous job or high risk hobby.

Calculate Your Cover

Find out how much cover you might need by using our simple online calculator. It will take into account your outstanding mortgage, any loans or credit cards, your monthly income and how many children you have.

Ultimately the right amount of cover is often a balance between what might be an ideal figure and what you can sensibly afford.

Calculate your cover here

Personal Service

We have tracked down the very best protection insurance advisers in the UK to ensure you have access to great advice and the best products from the leading insurers.

Instead of pushy sales people, our advisers offer a more personalised service to guide you through the process and ensure you enjoy lasting peace of mind by making an informed choice.

The Service You’ll Receive

Outstanding service and knowledgeable customer service rep. I received a call as promised in my email. Marie was very knowledgeable in her subject matter, she took some basic details and was very polite and courteous in her manner.

Marie was very sensitive when discussing personal circumstances and listened carefully and showed...

N Marsden

Other possible options...

Executive Income Protection

This type of policy pays out a regular monthly benefit should the insured key employee or director become too ill or injured to work. It is popular with contractors and directors working in their own limited company and covers up to 80% of their income (wages or dividends) in a tax-efficient way. Read more

Executive Income Protection operates in a very similar way to Personal Income Protection, providing a regular income if the person insured is unable to work due to illness or injury.

The main difference between the two types of policy is that Executive Income Protection can cover up to 80% of the individual's income, whether from wages or dividends or both, whereas most standard policies typically only cover up to 60%.

As such, it is an attractive benefit for high-earning small business owners and contractors.

The cost of the premiums is determined by how much cover is required, the age of the individual to be covered, any existing or past health conditions, what their current role entails, how long the cover is to last, and how long they are prepared to defer the first payment.

The premiums are paid by the company and are tax-deductible, which is an additional saving compared to personal policies.

Along with other benefits available, Executive Income Protection can be a valuable component of an overall financial plan, especially those with high incomes and significant financial responsibilities.

Free Quote

Relevant Life Cover

This type of policy can provide a complete tax-free solution to life insurance for company directors where both the premiums and the lump-sum payment in the event of a claim are tax-free. The premiums are not classed as a benefit-in-kind and, if the policy is written into a discretionary trust, then any payout is not subject to inheritance tax. Read more

If you’re a company director and you have life insurance in place to protect your family, you could be paying more tax than you need to.

Relevant Life Policies are a way of providing death-in-service benefits on an individual basis no matter how small your business is. They are not classed as a ‘benefit in kind’ so no tax is payable on the premiums. In most cases the benefits can be paid free of inheritance tax provided the benefits are payable through a discretionary trust.

What are the benefits?

  • Although the company pays the premiums, they are not normally assessable to income tax on the employee as a benefit-in-kind. This can be a significant saving, particularly for a higher-rate taxpayer
  • Unlike a registered group scheme, the benefit will not form part of the employee’s annual or lifetime pension allowance

What are the advantages of using a discretionary trust?

  • There are restrictions as to whom the benefits of a Relevant Life Policy can be paid, but the use of the trust is the most practical way of ensuring these restrictions are met. The beneficiaries who could be included are usually family members and dependents.
  • Having benefits paid through a trust ensures they cannot be taxed as part of the company’s trading income, nor do they form part of the company’s assets.
  • The trust is discretionary, allowing trustees to be flexible as to whom they pay benefits. However the employee can advise the trustees of his or her intentions by completing a nomination form. Although this is not legally binding on the trustees, it helps to guide them. The trustees will normally be the directors of the company.
  • Using a trust also ensures that in most circumstances benefits are paid free of both income tax and inheritance tax.
  • The maximum cover differs across insurers: for example, Bright Grey offer a figure up to 15 times the employee / director’s remuneration. This can include salary, regular dividends paid in lieu of salary and any benefits in kind.

Are there any limits to the cover I have?

  • The legislation does have some limits to qualify for the tax concessions, and to ensure these are met, it requires that:
  • The cover must be paid in a single lump sum before the age of 75.
  • Only Death & Terminal Illness benefits can be provided.
  • Benefits must be paid through a discretionary trust.
  • Beneficiaries are normally restricted to family members and dependents.
  • The maximum amount of cover allowable can depend on your remuneration and age.

Who are relevant life policies suitable for?

  • Company Directors that would like their company to pay for their life cover and offset the premiums against corporation tax
  • Small businesses that do not have enough eligible employees to warrant a group life scheme.
  • Directors of small limited companies that may be thinking of putting Key Person cover in place so that their company can pay the premiums on their cover
  • High-earning employees or directors who have substantial pension funds and do not want their benefits to form part of their lifetime allowance.
  • They are not suitable for the self-employed or equity partners, although their employed staff could be covered.

Free Quote Calculate your cover

Key Person Insurance

This type of policy protects businesses financially if a key individual within the business (typically a company director) dies or can no longer act in any capacity with immediate effect in the event of serious illness. It is often required by lenders to cover the full repayment of a loan. It is an important consideration for many small and medium-sized businesses. Read more

Key Man Insurance or Key Person Insurance is essentially a form of life insurance for businesses. It is generally taken out by a business to compensate for financial losses that would arise from the death or extended incapacity of the key individual(s) of the business specified in the policy, and in turn ensure the continuity of the business.

There are generally three categories of loss for which Key Man Insurance can provide compensation:

  • Protect losses related to the extended period when a key person is unable to work by providing temporary personnel and, if necessary, financing the recruitment and training of a replacement.
  • Protect profits such as offsetting lost income from lost sales or contracts; or losses resulting from the delay or cancellation of any business project that the key person was involved in; or loss of opportunity to expand, loss of specialised skills or knowledge.
  • Protect business & director loans, overdrafts or investments. The value of insurance arranged can be used cover their repayment in full, or to assist in generating continued profit (as above) to help make any monthly payments.

As a result, a Key Man or Key Person can be anyone directly associated with the business whose loss can cause financial strain to the business. For instance, they could be a Director of a company, a Partner, key sales people, key project managers and people with specific skills or knowledge which is especially valuable to the company.

Free Quote

Can’t decide?

For free advice, speak to a UK based adviser on
0333 987 3960* (9am-5pm Mon-Fri)

The telephone service is provided in partnership with BQI Protection Ltd and the quotation service is provided by an FCA-authorised insurance specialist