Director Income Protection
Black Lion Insurance
Income Protection for Company Directors
If you are a director of a limited company, company director sickness insurance from Black Lion Insurance (also known as company director income protection) could offer the safety net you need in difficult times.
How would the sudden loss of your income due to a serious illness or an injury impact you, or those you love? Would you have enough savings to keep a roof above your head and pay the bills?
First things first.
If you haven’t heard of director income protection, Black Lion Insurance aims to provide you with clear, expert guidance to help you make an informed decision about the right option for your needs and budget.
How does Director Income Protection differ from standard Income Protection?
Essentially, it is the company rather than the individual who will pay the premiums for this specialist cover.
The ultimate beneficiary remains the individual (the Director), but with director income protection, the benefit from any valid claim is paid to the company, which then pays the director.
Note that payments from the company to the director under this policy are subject to normal tax and national insurance.
Some smaller organisations offer Director Income Protection to senior-level executives as part of their remuneration package.
Director Income Protection – Things to know and think about
Firstly, you’ll need to consider the length of the policy. Secondly, you’ll need to offer accurate information on the current state of your health.
Another point to note is that if you are actively contributing to the success of the business and your earnings include dividend payments, you may be able to insure up to 80% of your gross salary and dividends. The exact amount will vary depending on the policy and the provider and there may be certain terms and conditions. For example, an insurer may wish to see that dividends have been paid regularly as opposed to in an ad-hoc manner.
Do I need Director Income Protection?
No one cannot predict the future. While you may currently be in good health, this may not always be the case.
If your family relies on your income how long could you afford not to drawn an income for?
At Black Lion Insurance, we hope you will never need to claim on your director income protection insurance. However, insurance is crucial in times of serious illness or accidents.
Speak with our team of qualified, specialist advisers to help clarify any questions you have about the differences between policy types.
Remember Own Occupation Cover.
We can advise you on this important distinction. If you’re a director, own occupation cover ensures you can claim if you are unable to perform your specific profession or skill within the business.
Why Black Lion Insurance?
The answer is simple. We are dedicated insurance experts. We provide fully qualified advice to educate and support your needs. We offer a comprehensive selection of the UK’s top insurers with your best interests at heart.
Director income protection is a specialist type of cover, so it’s important to make an informed decision. Contact us for more information today.
What are the different types cover?
Are you a sole trader?
When taking out a self-employed income protection insurance plan as a sole trader, you will be taking out a personal plan.
This plan covers up to 65% of your gross income and is exempt from income tax and national insurance. Your monthly insurance income is based on personal earnings and will be paid directly into your personal bank account. Business expenses cannot be claimed under this policy.
For limited company directors or contractors:
If you are the director of a limited company, you have 2 choices when it comes to your self-employed income protection policy. You can take out a personal plan, like for sole-traders, covering up to 65% of your gross income.
Alternatively, you can choose a Director Income Protection Plan, paid by your business, covering up to 80% of gross income and company dividends. The monthly insurance income is paid to the business and then to you via your business bank account.
This option will incur income tax and national insurance. There are various insurance policy options you need to consider.
What is ‘own occupation’ income protection insurance and why is it important?
We recommend considering an own occupation policy. This means that insurers will pay out for any medical reason preventing you from doing your specific job. Other definitions may not pay out if you can still do another job, but own occupation cover will pay out if you cannot perform your specific job.
How does a director income protection insurance policy work?
You develop an injury or illness that means you are unable to work.
You contact your insurer to make a claim. You will need to complete the necessary forms as well as provide a letter from your GP or medical professional.
As soon as your deferred period ends, you will receive your monthly insurance income, made payable either to your personal or business bank account, depending on your chosen policy.
You will continue to receive your income in accordance to your policy and can claim until your policy expires or you reach retirement age.
About Us
Black Lion Insurance specialise provide information for both employed and self employed individuals, as well as business owners on a variety of solutions, which range from income protection, keyman and shareholder protection insurance.
