Executive Income Protection
World Class Executive Income Protection Insurance
Safeguarding Your Leaders' Income, Securing Your Business
As a business owner, you know that the strength of your company often rests on the shoulders of its high-earning individuals – your executives, directors, and key talent. Their expertise, leadership, and contribution are invaluable. But what happens to their income, and critically, to your business's stability, if they are unable to work due to a long-term illness or injury?
That's where Goodniss Executive Income Protection becomes an essential safeguard. This specialized cover is designed to protect these vital individuals, and by extension, your entire business, from the financial fallout of extended absence due to ill health or injury.
Our dedicated advisors at Goodniss understand the sophisticated needs of businesses like yours. We take the time to tailor solutions that fit your corporate structure, ensuring your key people are protected and your business's operations remain resilient.
Richard Hadley is authorised to provide specialist advice on Protection and General Insurance only.
The suitability of Executive Income Protection depends on your company’s needs and should be discussed with an authorised adviser.
You can read a real-life example of how we helped a client secure their business in our blog post: Securing Your Greatest Asset: How Executive Income Protection Helped Secure Aisha's Future.
Why Executive Income Protection is Crucial for Your Business
Executive Income Protection provides a regular, tax-efficient income stream to your business if a covered executive or director becomes incapacitated due to illness or injury and cannot perform their role. This proactive financial planning can be vital for:
Protecting Key Salaries: Ensures that your business can continue to pay the salary and benefits of an absent executive, preventing financial strain on their household and maintaining morale.
Maintaining Business Continuity: Frees up operational funds that would otherwise be diverted to cover a key person's income, allowing your business to continue investing in growth and stability.
Avoiding Recruitment Pressure: Provides the financial breathing room needed to find and train a suitable replacement, rather than rushing a critical hiring decision.
Retaining Top Talent: Demonstrates a commitment to your most valuable employees, enhancing loyalty and providing an attractive benefit that aids in recruitment and retention.
Alleviating Financial Stress: Prevents the dual burden of managing an executive's health crisis alongside a significant financial shortfall for the business.
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If you are interested in becoming a client or you would like to learn more about our services, then we would be delighted to hear from you.
Understanding Executive Income Protection
What is Executive Income Protection?
Executive Income Protection is an insurance policy taken out by a business on the life of a key employee, typically a director, executive, or high-earner. If the insured individual becomes incapacitated due to illness or injury and can no longer work, the policy pays a regular income directly to the business. This income is then used to replace the executive's lost earnings.
Unlike personal income protection, which pays directly to the individual, Executive Income Protection provides funds to the company, which can then manage the executive's salary, cover temporary staffing costs, or secure a long-term replacement. It's a strategic tool for corporate financial resilience.
Who Needs Executive Income Protection?
Any business that relies heavily on its high-earning individuals, whose absence would significantly impact operations, decision-making, or revenue generation, should consider Executive Income Protection. This includes:
Company Directors and Executives: Whose leadership is central to strategic direction and daily operations.
Key Sales Directors or Business Development Leaders: Whose personal relationships and deal-making abilities directly drive income.
Specialist Talent: Individuals with highly niche skills or knowledge that are difficult and expensive to replace.
If a key executive's inability to work due to health issues would create a substantial financial and operational void in your company, this cover is paramount.
Key Features of Executive Income Protection
Tax-Efficient Structure: Premiums paid by the company can often be treated as a business expense, and the benefits paid to the company are typically tax-free.
Definition of Incapacity: Policies clearly define what constitutes "incapacity" or "total disability" to trigger a claim, ensuring clarity for all parties.
Deferred Period: You can choose a waiting period (e.g., 4, 13, 26, or 52 weeks) before payments begin, aligning with your company's sick pay policy.
Benefit Amount: The policy pays a regular income up to a certain percentage of the executive's pre-disability earnings.
Benefit Period: You can select how long the benefit will be paid for (e.g., 2 years, 5 years, or up to retirement age).
Ensuring Your Business's Stability and Talent Retention
Investing in Executive Income Protection not only provides a critical financial buffer but also signals a strong commitment to your most valuable team members. It's a forward-thinking move that supports both the individual's well-being and the ongoing vitality of your business.
At Goodniss, we're dedicated to helping you put these vital protections in place. Let us help you safeguard your high-earning individuals and ensure the continued stability of your enterprise.
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IMPORTANT INFORMATION
It is crucial to understand that Executive Income Protection products are subject to specific terms, conditions, and exclusions. While these policies offer vital financial security, they are designed to provide a regular income payment upon the incapacitation of a key individual, as defined within the policy document. However, not all illnesses or circumstances will trigger a payout.
It is imperative that prospective policyholders thoroughly review the Product Disclosure Statement (PDS) or policy wording before committing to a policy. This document will detail:
The specific definitions of incapacity (e.g., "own occupation," "suited occupation," or "any occupation").
Benefit amounts and benefit periods.
Waiting periods before benefits commence.
Any specific exclusions that may apply (e.g., pre-existing medical conditions, illnesses or injuries resulting from declared or undeclared dangerous activities, or conditions not explicitly covered).
Failure to understand these terms and exclusions could lead to disappointment at the time of a claim. If any aspect of the policy is unclear, please seek clarification from your insurer or a qualified financial advisor like Richard Hadley to ensure the product meets your business's individual needs and expectations.