Income Protection: Personal v Executive

Income Protection can be set-up as Personal Income Protection or Executive Income Protection.

Both are individual, one-person policies and ultimately serve the same purposes in terms of protecting earned income. All the features are the same in terms of deferred period option, the amount of cover and underwriting requirements.

However, some key differences between the two types are below:

• Personal Income Protection is paid for personally, whereas Executive Income Protection is paid by a Company

• Premiums to a Personal Income Protection policy get tax relief at the marginal rate (40%). Premiums paid by a Company into an Executive Income Protection policy can get tax relief at up to 52%, as they are exempt from PRSI (4%) and USC (up to 8%). The Premiums a Company pay to an Executive Income Protection policy also qualify for Corporate Tax Relief.

• In the event of a Claim, a Personal Income Protection policy pays out to the individual directly. With an Executive policy, the payment is made to the Company first and foremost.