Executive income protection insurance

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Chris Palmer

We have used Elizabeth on 2 recent funding transactions. She is a star. Always checked in at end of day where things were at & updated me. Great customer service & would certainly recommend her. Thankyou Elizabeth.

Dec 12, 2024

Mike maur

It's been a pleasure dealing with Elizabeth, Def a Gem for her business. Amazing communicator and process dealing with all the paperwork was made easy and stress free. Keep it up !

Nov 28, 2024

Nasir Abbas Kazmi

I applied vehicle Finance through Swoop & lady Ikra help me from Beginning to end,she s very professional & helpful. Its just took 3 to 4 days & now i got new vehicle. I received Best customer services from Ikra & High recommend for this Swoop Finance.

Nov 26, 2024

Hazel Cuizon

Ayesha was very prompt and friendly to deal with and answered all my questions in a timely and professional manner. Very happy, highly recommend 🙂

Nov 24, 2024

Andrew Frazer

Cynthi was a fantastic help in organising what was needing and obtaining finance

Nov 8, 2024

Chris Skeates

Predrag and the Swoop team have been outstanding. Very attentive to our needs and staying on top of our funding request with their partners.

Oct 24, 2024

Leo Tsuo

Great experience. They quickly understood my needs and was fast to find a lender that met those needs. Highly recommend

Oct 22, 2024

Kash De Silva

I had a fantastic experience working with Elizabeth Tan for my business lending needs. She provided exceptional support and guidance, helping me navigate the process with ease. Her expertise and dedication were instrumental in taking my business to the next stage. I highly recommend her to anyone looking for lending assistance!

Oct 15, 2024

Shannon T

Cynthia has gone above and beyond, explained the process, consequences, and found me the most suitable solutions for my business in a very busy time! I found the help (even before I was guaranteed to use them) invaluable and the help made all the difference!

Oct 9, 2024

Jon Marc

Swoop came in at just the right time and there help was very much what took me over the hump to expand. They really know how to help and they follow up and make sure you’ve been taken care of!

Oct 8, 2024

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Page written by Chris Godfrey. Last reviewed on September 23, 2024. Next review due April 1, 2025.

For many business owners, especially those within small companies, being unable to work because they are injured or sick will usually mean a loss of some or all of their income. This can have life-changing impact, causing them to fall behind on mortgage payments, run up debts, run foul of the tax man, even lose their business. Fortunately, executive income protection is available to eliminate this threat. Use it to protect directors and key employees – safeguarding their earnings and preventing financial catastrophe should the worst ever happen.

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What is executive income protection insurance?

Designed to support small and medium-sized companies, executive income protection (EIP) is a type of business insurance. It pays a regular monthly benefit should a key employee or director become too ill or injured to work. Popular with contractors and directors working in their own limited company, EIP can reduce the impact of long-term illness or injury, covering up to 80% of the insured’s income.

Key features of an executive income protection insurance policy

Suitable for directors or employees of limited companies
Usually counts as a tax-deductible expense to the company
Protects an individual from loss of income due to illness or injury
Tax-efficient way of taking out income protection
Can cover up to 80% of the insured’s income, including dividends and directors’ loans
Options to also cover employer national insurance payments and pension contributions, as well as spousal earnings

Policy details:

Policy term – policy will usually run until the employee retires or reaches a maximum age of 70 years.
Payout period – choose between short-term plans which pay out for 1-5 years, or a long-term plan that pays out until the employee is well enough to work again or reaches the policy end date.
Deferral period – this is the amount of time the insured needs to be off work before the policy starts to pay out. The longer the deferral period the lower the premiums are. 1 to 4 weeks is a typical deferral period.
Guaranteed or reviewable premiums – reviewable premiums are cheaper initially, however the insurer will retain the option to review the prices periodically (usually every 5 years).
Index linking – for extra cost, the plan may be set to track inflation. This will cost more but it means the plan is likely to remain more relevant in the future.

What does executive income protection cover?

Executive income protection insurance will cover the income of the insured, whether that is generated by salary, dividends, or director’s loans.

How does executive income protection work?

Executive income protection protects the insured’s income in the event of accidental injury or any medical issue they may suffer from except those they experienced in the past (known as ‘pre-existing conditions’).

The policy is arranged and paid for by the company (the policy owner) on the life of the employee (the person insured). If the employee becomes ill or injured and is unable to work, the company makes a claim against the policy. All payments from the insurer are paid to the company who then pass those payments to the employee via PAYE to fund their ongoing sick pay. The employee can use the funds to cover normal expenses, such as mortgage payments, food and utilities.

Who is executive income protection for?

Executive income protection is for the owners, directors and key employees of a limited company. Sole traders, the self-employed and partnerships who do not work through their own limited company should purchase individual income protection insurance. This cover is similar to EIP, but may have differing levels of cover, with any claims being paid direct to the individual, not via a company and PAYE.

Is this cover essential?

Yes, it is. The temporary or long-term loss of a key company director or employee can have great impact on the business, but it can be even more devastating to the individual who suffers sickness or injury. Relying on reduced income from statutory sick pay and state benefits may not be sufficient to cover their day-to-day expenses or fund any specialist medical support they need. Executive income protection insurance is designed to pick up the slack, ensuring company owners and their all-important employees can adequately maintain their lifestyle as they recover.

How Swoop can help

Don’t let illness or injury impact your business and the lives of your employees. Register with Swoop today to compare top-quality executive income protection from a range of insurers and to discuss all your business insurance needs.

Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

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