Cover 80% of your income with executive income protection

A 40-year-old company director would pay around £75.60 a month for £50,000 of annual Executive Income Protection benefit, or £116.26 a month for £80,000, with a 3-month deferred period and cover to age 68. Between age 35 (£49.89) and age 60 (£132.69), the monthly premium for £50,000 of benefit rises roughly 2.7 times. Increasing the benefit from £50,000 to £80,000 adds roughly 53–55% to the monthly premium at every age shown.

(Ages shown are the age at the quote date (1 October 2026). Premiums are indicative only and will depend on the individual's occupation, health, lifestyle and underwriting.)

Who needs Executive Income Protection?

The people who need it most are directors who are the main breadwinner in their business — because in most owner-managed SMEs, if that person can't work, the business doesn't just lose a colleague; it loses the person generating its income. This is especially true where the director's income is shared with a spouse through salary and dividends, and where cover needs to reflect both incomes, not just one, and both salary and dividends together, not salary alone. That's exactly the gap executive income protection is built to close.

How Does Executive Income Protection Work?

The Company Takes Out the Policy

Your limited company is the policyholder. The company applies for the policy, pays the premiums, and receives any claim. Where the premiums meet HMRC's wholly and exclusively test for business expenses, the company can claim corporation tax relief on them, with no personal tax or Benefit in Kind charge for you as the director.

What Triggers a Claim?

If you're unable to work due to illness or injury and that inability extends beyond your policy's deferred period, the insurer begins paying a monthly benefit to your company. Learn more about choosing the right deferred period below.

How Much Does the Policy Pay Out?

The policy pays a monthly benefit equivalent to a proportion of your total remuneration, up to 80% of salary and dividends combined. That benefit is paid to the company, which then passes it to you as PAYE income.

How Long Does the Payout Continue?

Most executive income protection policies are written to pay out until the earlier of your return to work, the end of the policy term, or your selected retirement age. For most directors, that means the policy provides long-term protection - not just a short-term bridge - if a serious illness or injury prevents them from working for an extended period.

What Happens to the Payout?

The payout arrives in the business bank account. The company then pays it to you, typically as salary, which means income tax and National Insurance apply at that stage. This differs from how a personal income protection payout is treated: the benefit is paid directly to you and is generally tax-free in your hands.

Specifically designed around the unique ways company owners are paid

Why Personal Income Protection Isn’t Enough for Directors

Personal income protection is a perfectly good product, but for employees. For directors, it has a fundamental structural problem that most people don't discover until they actually try to claim.

The Dividend Problem

Most directors draw a modest salary that is typically around the National Insurance threshold, and take the rest of their income as dividends. Personal income protection policies calculate the benefit based on your earned income, which means your salary. Dividends don't count.

For a director drawing £12,570 in salary and £80,000 in dividends, a personal policy would calculate the benefit based on £12,570. The cover level that results is around £7,500 a year, which is barely enough to cover basic outgoings. A personal policy leaves 92% of their income completely unprotected.

The Benefit Cap Problem

Even if a personal policy could cover dividends, the benefit would still be capped at 60% of insured income, and because that's calculated on your salary alone, which for most directors is modest, the resulting maximum is often too low to be meaningful.

Executive income protection raises the cap to 80% and applies it to your total remuneration, so the ceiling itself is set on the right number, not just a higher percentage of the wrong one.

The Spouse Dividend Problem

For husband-and-wife companies, there's a third gap: personal cover only ever looks at your income, never your spouse's dividends - something executive income protection can include, as covered above.

The Tax Efficiency Problem

Personal income protection premiums are paid from your personal income, money that has already been taxed. There's no tax relief on the premiums. Executive income protection premiums are paid by the company, and where they meet HMRC's wholly and exclusively test for business expenses, they qualify for corporation tax relief.

The Bottom Line

For most directors, personal income protection isn't just suboptimal - it's fundamentally inadequate. It covers the wrong income at the wrong level with the wrong tax treatment. Executive income protection was built to fix all three problems at once.

How Much Cover Do You Need

Start With What You Actually Need to Receive

The right starting point isn't your income, it's your outgoings. What does your household genuinely need every month to maintain its financial position? Mortgage or rent. School fees, if applicable. Pension contributions. Living costs. Business obligations that would continue even if you weren't working. Add those up to find the net monthly income you need the policy to replace.

Work Backwards to the Cover Level

Because the payout is paid to your company first and then to you as salary, with income tax and National Insurance applying at that stage, the gross benefit level needs to be set higher than the net income figure you worked out above.

A benefit that looks right as a percentage of your gross remuneration can still leave you short once tax is taken into account, which is why this is worth calculating properly with your adviser rather than picking a figure that sounds close enough.

The 80% Ceiling

Executive income protection policies allow you to cover up to 80% of your total remuneration, with salary and dividends combined. This is the maximum the insurer will provide, designed to keep an incentive to return to work. For most directors, 80% of total remuneration is a meaningful and generous benefit level - significantly higher than the 60% of salary available under a personal policy.

Don't Forget the Spouse Dividend Calculation

If your spouse also draws dividends from the business, remember to include them in your total remuneration figure, as covered above; executive income protection is one of the few products that allows this.

The Deferred Period

The deferred period is the gap between when you can no longer work and when the policy starts paying out. It's one of the biggest levers on the premium, and the longer the deferred period, the lower the cost.

The right deferred period matches how long your business can realistically keep paying your salary and dividends before the financial pressure becomes acute. For most directors, that's somewhere between three and six months.

The ability to add both incomes into one policy is essential for some business owners

Executive Income Protection vs Personal Income Protection

The Fundamental Difference

Personal income protection was designed for employees. Executive income protection was designed for directors. That distinction drives almost every difference in the table below: the benefit level, what income is covered, who pays, and the tax treatment on both sides.