Executive income protection solutions
Executive Income Protection can help small business clients by protecting against the financial impact of their employees’ incapacity on the business. Income protection insurance cover can include the employee’s earnings, dividends and P11D benefits.
How does executive income protection work?
An Executive Income Protection plan would pay a monthly benefit to your business in the event of a valid claim. Your business can then use this benefit to fund the employee’s ongoing sick pay if they are unable to work as a result of becoming incapacitated due to illness or injury. This can help your employee meet their financial commitments whilst not leaving them to rely solely on their savings or state benefits.
What is executive income protection?
If your employee become incapitated and is unable to work this insurance product can cover the employee’s earnings, dividends and P11D benefits. Additional cover can be arranged at an additional cost to cover employer pension contributions and National Insurance (NI) contributions.
What are the details?
- Minimum cover: No minimum amount of cover. Driven by minimum premium.
- Maximum cover: 80% of earnings up to £25,000 per month (level) (£300,000) per year or £17,500 per month (increasing) (£210,000) per year. For Increasing Executive Income Protection, subsequent increases cannot increase the monthly benefit above £25,000 (£300,000 per year.)
- Employer pension contributions: max £40,000 (Additional Cover, available at extra cost)
- Employer National Insurance contributions: max £42500 (Additional Cover, available at extra cost)
- Type of cover: Level and increasing cover available. Increasing cover increases in line with changes in the Retail Price Index up to a maximum of 10% of current monthly benefit and the premium is multiplied by 1.5 subject to a maximum increase of 15% of current premium. Only available as a single life plan.
- Age Limits: The policy must end after your employee’s 50th birthday but before their 70th birthday or planned retirement date, whichever is earlier. You can take this policy out from your employee’s 18th birthday up until their 60th birthday. If your employee is 45 or over when you take out the policy, the minimum length of the policy is five years.
- Premiums: Payable monthly by Direct Debit.
What are the benefits and options?
Changing Your Policy (Also known as Guaranteed Insurability Option):
Can increase cover on certain specified events, without need for further medical evidence. Eligibility criteria and restrictions apply.
Other changes:
Your client can request to make other changes to their plan. A new policy may need to be set up.
Deferred Period:
Your client can choose from 4, 8, 13, 26 or 52 weeks.
Proportionate Benefit:
Automatically included.
Rehabilitation Support Service:
Automatically included at the point of claim, provides back to work support, for mental and physical health
Wellbeing Support:
Access to dedicated specialist nurses. This service is available from the day the policy starts and is provided by Red Arc Assured Limited.
Linked claims:
Automatically included.
Waiver of Premium:
Automatically included.