Legal & General’s executive income protection (IP) employer pension contribution limit will now include dividends as well as PAYE earnings.
The IP product, launched a year ago during the pandemic, is designed to provide cover for small business owners and individual employees on higher salaries.
And in response to adviser feedback, Legal & General revealed it is now including dividends as well as PAYE earnings as a basis for calculating the maximum employer pension contribution benefit.
The new limit is a third of total remuneration, up to a maximum of £40,000, allowing more clients who take a proportion of their income in dividends to benefit from a higher level of cover for their employer pension contribution under the plan.
Robert Betts, market development manager at Legal & General, said the product had become an important part of its overall income protection suite.
And research from the insurer suggested the vast majority of business owners want to find out more about business protection offerings.
“After listening to advisers, we have extended our earnings definition to now include dividends, making it even easier for them to use the policy to protect and maintain their client’s employer pension contributions during periods of long-term incapacity,” Betts added.