Executive Income Protection vs Personal Income Protection: What’s the Difference?

The key difference is who pays and what’s covered. Executive income protection is arranged and paid for by a limited company on behalf of a director, always covers salary and dividends together up to 80%, and carries no benefit-in-kind charge, while personal income protection is paid for by an individual and typically covers up to 60% of income.

Key facts
•  Executive income protection is company-owned; personal income protection is individually owned.
•  Executive cover always includes salary and dividends together, up to 80% combined; personal cover typically reaches up to 60%.
•  Executive premiums qualify for corporation tax relief with no benefit-in-kind charge; personal premiums attract no tax relief.
•  A director’s income and a non-working shareholder spouse’s income can both be insured under one executive policy.
•  You can potentially hold both, subject to the insurer’s overall income-replacement limits.
•  Directors without group cover are the main audience for the executive version.

Executive Income Protection vs Personal Income Protection: The Key Difference

Directors comparing executive income protection vs income protection generally, whether that means the personal or group version, are usually asking the same question: who pays, what’s covered, and how is it taxed. Here, we focus on the personal comparison, as that’s the alternative most directors are weighing up.

Executive income protection is a company-paid policy, taken out by a limited company on a director’s life, built around salary and dividends together and insuring up to 80% of that combined figure. Personal income protection is bought and paid for by an individual, using their own post-tax income, and typically insures up to 60% of income. Both replace part of your income if you’re unable to work, but who pays, what’s counted, and how it’s taxed is where they diverge. 

In short: if your company pays and you want salary and dividends both covered at up to 80%, executive income protection is the fit. If you pay personally and want a fully portable policy, then personal income protection is the fit.

Comparison Table: Executive vs Personal Income Protection

Feature	Executive Income Protection	Personal Income Protection
Who pays the premium	The limited company	The individual
What’s insured	Salary and dividends together, potentially bonuses	Salary/earned income
Typical benefit level	Up to 80% of combined salary and dividends	Typically up to 60% of income
Tax treatment of premium	Business expense, corporation tax relief, no BIK	No tax relief; paid from post-tax income
Tax treatment of benefit	Paid to the company completely tax-free, then to director via PAYE	Paid direct to the individual, usually tax-free
Who can be insured	Director, or director plus a non-working shareholder spouse jointly	One named individual
Typical eligibility	Directors and salaried owners of limited companies	Anyone, including the self-employed and employees

Who Pays for Each Type of Cover?

With executive income protection, the company is the policyholder and pays the monthly premium as a business cost. With personal income protection, you take out the policy yourself and pay for it from your own bank account, after tax has already been deducted from your income.

How Tax Treatment Differs

Executive income protection premiums qualify for corporation tax relief and carry no benefit-in-kind charge for the director, and the eventual claim benefit is paid to the company completely tax-free before reaching the director via payroll. Personal income protection premiums attract no tax relief at all, but the benefit itself is usually paid to the policyholder tax-free too.

Which One Is Right for You?

If You’re a Company Director

If you draw income from your own limited company and don’t have a group scheme to fall back on, executive income protection is usually the more tax-efficient route, since the company is meeting a cost it can offset against profit. See our guide to what executive income protection is for eligibility detail.

If You’re Self-Employed or Not a Director

Sole traders, partners without a limited company, and employees without director status can’t take out executive income protection, since it’s a company-owned product. Personal income protection is the natural fit here instead.

Which Is Right For You? 

The right option depends on how you earn your income, who you want to pay for your cover and how much of your income you need to protect. 

For limited company directors, executive income protection can offer a tax-efficient way to protect salary dividends, while personal income protection provides a flexible option for individuals who want to own and pay for their own cover.

If you’re a director and unsure which option is right for you, speak to our team to find the right level of cover for your circumstances.

Last reviewed: September 2026. Next review: April 2027. Tax rates and thresholds are subject to change; this article will be updated following each HMRC Autumn Budget or Spring Statement where relevant thresholds change.