A thriving business relies on its people. Directors, key employees, and senior managers often hold the knowledge, skills, and client relationships that are critical to a company’s ongoing success. But what happens if a key individual is unable to work due to illness or injury? Without proper protection, this can lead to financial strain, operational disruption, and lost revenue.
At Howard Wright Financial Planning, we help business owners implement income protection strategies that safeguard both the company and its essential personnel.
What is Income Protection?
Income protection insurance is a policy that provides a replacement income if an individual is unable to work due to illness or injury. For businesses, this can cover directors and key employees, ensuring that the company continues to operate smoothly while protecting the financial security of its essential staff.
Key features include:
- Payment of a percentage of the insured person’s salary (typically 50–70%)
- Coverage for short-term or long-term absences
- Flexible benefit periods and deferred start options
- Tax-efficient options when arranged through the company
Why Income Protection is Essential for Businesses
1. Safeguards Cash Flow
If a key employee or director cannot work, the company may face lost revenue or extra costs to cover their responsibilities. Income protection ensures that their salary or a portion of it is covered, helping maintain business stability.
2. Retains Key Talent
Offering income protection demonstrates that the company values its employees. It can improve staff retention, morale and loyalty, particularly among senior or specialist personnel.
3. Supports Business Continuity
With income protection in place, the business can continue operating without disruption, even if a key individual is absent for an extended period. This helps maintain client confidence and operational efficiency.
4. Complements Other Business Protections
Income protection works alongside other strategies such as key person insurance, shareholder protection, and succession planning to create a comprehensive safety net for the business.
How to Choose the Right Policy
Selecting the most suitable income protection policy depends on:
- The role and responsibilities of the employee or director
- The financial impact of their absence on the business
- The desired benefit period and deferred period
- Tax efficiency and company structure
A Chartered Financial Planner can assess these factors and design a policy that meets your business needs while providing continued peace of mind.
Take Control of Your Business’s Future
Income protection is not a one size fits all solution. At Howard Wright, we tailor strategies to your company’s specific needs, helping safeguard essential staff, maintain business continuity, and protect your ongoing financial stability.
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Contact our team of Chartered Financial Advisers on 0345 688 4939 or use our 20-second enquiry form to discuss how income protection can secure your business and protect your key people. We look forward to hearing from you and showing how our award-winning team can help keep your company protected.
Disclaimer: The information provided in this blog is for general guidance only and does not constitute financial advice. We recommend seeking personalised advice from a qualified financial planner. Past performance is not indicative of future results. The value of investments can go down as well as up, and you may not get back the amount originally invested.
By choosing Howard Wright, you’re not just arranging income protection; you’re investing in your business’s stability, continuity, and peace of mind. Contact us today to get started.