Does your remuneration package include company dividends?
Executive Income Protection is a specialist protection that covers both your salary and dividends paid by your company under which it is possible to cover up to 80% of your earnings.
Taking out the right policy means Executive Income Protection insurance will provide you with an income should you get injured or become sick. You can start receiving an income immediately, if for example, you are self-employed, or defer it until your employer’s sick pay ends.
Executive Income Protection may be the most important income protection you can take out.
The monthly income you receive can then be used for any purpose you choose, including paying the mortgage or rent, household bills, medical bills, credit cards, nursery costs and so on.
Executive Income Protection may be the most important income protection you can take out; however with so many options available, that can make it tailored to meet either/or both your budget or particular needs, it’s not easy to get the best solution yourself.
Policies that are taken out online without independent advice are only underwritten at point of claim and not at the outset of the policy, resulting in many claims not being paid out. So it pays to talk to an adviser to ensure you get an affordable policy that takes care of you before your savings run out.
Knowing you’ve chosen the right protection solution is only achieved if you have received professional advice. There are many Protection providers and each has their own specialisations and exclusions which means policies taken out online or without independent advice are often not paid out.
Lightblue Online was set up to provide specialist help to people unsure how to go about choosing from the many Protection products available. For example, some providers will include the yearly contribution towards your pension made by the company as part of the income calculation. So it’s important to make sure that if you’re buying a policy it’s the right one for you.
Our specialists will help you to navigate all the options to find the cover that is right for you and your family at an affordable rate.
Executive Income Protection Options
As with all things the more options you choose the higher the price. Executive Income Protection is no different and different insurers load the options differently. It is therefore important to determine what you need and what you would like so we can find the best Income Protection policy available to you in the market place. Below are some of those options.
The number of weeks or months you can survive on, for example, your savings or company sick pay before you need to receive the income from the insurer. The longer the period the cheaper the cost.
Typically 12 or 24 months or for longer term policies, if you are unable to return to work, up to your selected retirement age. The shorter the period the cheaper the cost.
Level or Indexed
‘Level’ means that the amount you receive will remain the same throughout the time you have the insurance regardless of whether your income or expenditure increases. Alternatively, the amount you receive can increase each year in line with inflation using either the retail price index or the consumer price index. With some insurers this can be declined on an annual basis.
Guaranteed premiums would suggest that what you pay stays the same throughout the policy term unless you increase the required income amount. For some policies this is true, you pay the same amount month after month until the policy ends. For others its guaranteed to increase based on a rate table which means the price you pay in the future for each £1 is guaranteed to go up each year at the rate set out in the guaranteed rate table sent with your policy. You can, therefore, calculate what your premiums will be in the future..
If your premium is not guaranteed then the premiums can change each year due to age or changes to your health. Reviewable policies usually start cheaper than guaranteed policies, but they may end up being more expensive.
Own or Any Occupation
When the ‘Own Occupation’ definition of incapacity is chosen the policy can pay out for any medical condition that prevents you from working in your own specific job role. When ‘Any’ is used the insurer will only pay you if you are unable to perform any occupation. ‘Own’ is more expensive than ‘Any’.
Waiver of Premium
If Waiver of Premium is selected then when you begin receiving an income from the insurance policy the premiums no longer need to be paid until you return to work or your selected pay-out period is reached.
Back to Work Benefit
Receive a percentage of your income if, on returning to work, the illness or injury you claimed for restricts your duties and you earn less. Some insurers will also pay a top-up should you start a different occupation that pays less.