Executive Income Protection
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Executive Income Protection

Employers (Ltd companies) can choose an executive income protection policy to sit alongside their employees’ relevant life policy. This will allow the employer to continue paying a salary to their ill or injured employees while they’re unable to work, aiding their recovery. This could also provide tax benefits:

Employer benefits:

  • Corporation tax relief (so long as the premium are wholly and exclusively for the purposes of the business).
  • No National Insurance Contributions to pay on the policy payments paid to the fund executive income protection.

Employee benefits:

  • No National Insurance Contributions to pay on the policy payments to fund the EIPI.
  • Can benefit from their employer making the policy payments and these aren’t subject to tax as a benefit in kind or remuneration.

 

Example based on 40-year-old contractor drawing £40,000 a combination of Salary and Dividends

 

Type Cover Term Monthly Cost Corporation Tax Relief Tax Adjusted Total Cost to The Business
Income Protection £2456 per month (after 8 weeks) Age 60 £89.88 19% £72.80

 

If you would like help with your Executive Income Protection, please do get in touch and one of our protection specialists would be more than happy to help.

 

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