Executive Income Protection
Executive Income Protection is a cost-effective solution that allows employers to provide income security for company directors in the event of an unforeseen illness or injury in their business.
This plan works similarly to an ordinary income protection policy offering a replacement income, only difference being, the executive income protection is taken out and paid for by the business on behalf of the Director or employee. In the event of a claim, the benefit is paid directly to the company who continues to pay the employee or director through PAYE whilst they are unable to work.
Protected Pension Contributions
In addition, the Income Protection plan can also allow for the cost of pension contributions to be covered. Contributions can be protected up to 33% of salary to a maximum of €50,000. The policy will also ensure employer pension contributions are maintained whilst claiming on the policy.
In the event of an insurance claim, the insurance company will pay your benefit directly to you, after tax, USC and any other relevant deductions.
The premiums that are paid for by the employer qualify as an allowable business expense that can be offset against corporation tax.
If you need to claim, the insurer will pay the income benefit to the employer, who passes it onto the employee through salary, making any relevant tax and USC deductions. With a tax deductible premiums, you will continue to be paid while you’re unable to work.
Understand your policy
As there are many options to this policy, it is important that you speak with a Smart financial advisor to make sure that you fully understand the policy and that you avail of the right type of cover that suits your requirements.
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