Executive Income Protection
Safeguarding Clinical Income & Practice Continuity
For surgeons, dentists and other clinical directors operating through limited companies or private practices, Executive Income Protection (EIP) provides a tax-efficient way to protect remuneration if an illness or injury prevents you from working long term.
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What is Executive Income Protection?
Executive Income Protection is a business-owned insurance policy taken out on one or more clinicians or key employees. If the insured individual is unable to work because of illness or injury, the policy pays a monthly benefit to the practice, which then continues to provide income to the individual through payroll.
In a clinical practice, this benefit can extend beyond base salary to include:
- Dividends and practise-based remuneration
- P11D benefits
- Optional cover for employer pension contributions and National Insurance payments
Unlike personal income protection, this structure allows practices to offer a comprehensive safety net while retaining tax efficiency and continuity planning.
For clinicians, losing the ability to work due to health issues can disrupt both personal and practice finances, especially where NHS and private practice income streams intersect or where statutory sick pay is limited or non-existent.
Executive Income Protection addresses three core vulnerabilities:
Income continuity for clinicians
When illness like musculoskeletal injury or burnout affects ability to perform clinical duties, EIP helps preserve personal cash flow via continued payroll payments.
Practice stability
Practices often absorb short-term sick pay but can be financially challenged by prolonged absences. EIP provides funds to sustain payroll, recruitment and practice overheads.
Tax efficiency
Premiums are generally allowable business expenses, meaning corporation tax relief may be available, and they are not normally treated as a benefit-in-kind for clinicians.
Benefits of Executive Income Protection
1. Tax-efficient
Premiums are usually classed as business expenses (not P11D benefits).
2. PAYE-compliant payouts
Benefits are paid through payroll and taxed like salary.
3. Tailored for directors and contractors
Cover salary and dividends in one plan.
4. Flexible and comprehensive
Suitable for every size of business—from micro to mid-market
How it Works In Practice
Policy Setup
The practice arranges an employer-owned EIP policy that can cover salary, dividends, pension and NI contributions for selected clinicians or directors.Deferred & Benefit Periods
You choose how long the policy waits (deferred period) before payments begin and how long benefits can be paid — up to retirement age if required.Incapacity & Claim
If a covered clinician cannot work due to illness or injury, a claim is lodged with the insurer. Once approved and after the deferral period, monthly benefits are paid to the practice.
Executive Income Protection is especially relevant if you are:
- A surgeon, dentist or specialist clinician paid via limited company or private practice structure
- A clinical director whose absence would disrupt practice finances
- A key employee whose unique skills or referral base are integral to revenue
- A practice owner seeking enhanced employee benefits to retain talent
- Salary
- Dividends
- Overtime & Bonuses
- P11D benefits
- Spousal or partner dividends lost due to incapacity
- Employer pension and NI contributions (optional)
- Up to 80% of annual earnings, capped at £300,000 (level benefits) or £210,000 (indexed).
- Employer pension contributions: up to £40,000.
- Employer NI contributions: up to £42,500.
Your Broadbench adviser with use an Executive Income Protection calculator to explore your benefit level.
Key Features and Options
Own occupation cover
Payments focus on inability to perform clinical duties rather than any job, which is important for specialist roles.
Indexation
Benefits that can increase in line with inflation.
Deferred periods
From weeks to months before benefits start, which helps balance cost and coverage.
Benefit periods
Limited-term or full cover to retirement (ages 50–70).
Waiver of premium
Premiums can be waived during a valid claim.
Rehabilitation support
Access to structured return-to-work programmes for clinicians.
Proportionate benefits
Partial benefits if returning to work at reduced hours.
Feature | Executive Cover | Personal Cover |
Paid by | Employer | Individual |
Tax deductible | Usually, for the business | No |
Taxed benefit | Yes (PAYE) | No (individual responsibility) |
Dividend cover | ✅ Yes | ❌ No |
P11D benefit status | ❌ Usually not a benefit in kind | N/A |
For clinicians paid through a combination of salary and dividends, Executive Income Protection offers more robust and tax-smart coverage than a personal policy.
Please note: This content is based on our understanding of UK tax laws as of 2025. Tax treatment may change. Always consult a qualified Broadbench advisor for personalised advice.
In 2024, UK insurers paid out £7.34 billion in protection claims, highlighting both the rising need and the value of cover. Despite this, only 14% of adults in the UK have income protection. Now is the time to safeguard your business and your people.
Let’s Build Your Protection Plan
Our specialists will work with you to design a bespoke Executive Income Protection policy. Whether you need cover for a single key employee, your entire leadership team, or a portfolio of contractors, we’ll help you get the protection you need at the right cost.
Speak to a dedicated advisor for Executive Income Protection quotes that fit your team and budget.
How Much Does Executive Income Protection Cost?
The Executive Income Protection cost depends on factors such as:
- Age and health of the insured
- Chosen deferred and benefit periods
- Occupation risk level
- Benefit amount and whether it includes dividends and pension cover
- Indexation and premium type (guaranteed vs reviewable)
Get in touch for custom Executive Income Protection quotes tailored to your medical team’s unique profile.
Tax Facts
Tax treatment is an important element for clinicians and practice owners:
- Premiums may be deductible as an allowable business expense for the practice.
- Benefits are paid to the practice and then to the clinician via payroll, subject to income tax and NI at that stage.
- Correct policy structuring is crucial to ensure benefits are not treated as a benefit-in-kind for clinicians.
Always coordinate with your accountant or financial adviser to ensure the policy meets HMRC requirements and your broader tax strategy.
All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs’ practice. Levels and bases of tax relief are subject to change.
Summary
For medical professionals who combine clinical excellence with business leadership:
- Executive Income Protection provides a practice-owned solution for protecting income if you’re unable to work due to illness or injury.
- It can be tax-efficient, deductible as a business expense and structured to minimise benefit-in-kind issues.
- Payments help sustain both personal remuneration and practice operations during prolonged absence.
FAQs
How does Executive Income Protection work?
Executive Income Protection (EIP) covers an employee’s sick pay if they are unable to work due to illness or injury. The benefit is paid to the company, which then passes it on to the employee, with tax applied at that stage.
Who is the owner of an Executive Income Protection (EIP) Plan?
The policy is owned and funded by the business, not the insured individual.
How long does income protection last?
You can choose the policy duration, but it cannot extend beyond your retirement age.
What is short-term income protection?
A short-term income protection plan provides coverage for a portion of your income if you’re unable to work due to illness or injury, typically for up to 12 or 24 months per claim.
What is long-term income protection?
A long-term policy covers a portion of your income until you either return to work or the policy expires. Most plans offer coverage up to retirement age.
What is a deferral period?
The deferral period is the waiting time between becoming ill or injured and when you can start claiming benefits. Shorter deferral periods increase the cost of the policy.
For example, if you have three months of sick pay and savings to cover two additional months, a five-month deferral period may be suitable.
What is "waiver of premium"?
Waiver of premium is a feature that covers your insurance payments while you’re claiming benefits. This is typically included as standard with executive income protection.
Ready to secure the cover that’s right for you?
Fill out the form below to arrange a time to speak to a Executive Income Protection expert.