Business Cover - Relevant Life Insurance

A Relevant Life policy is a single life, stand-alone death-in-service plan, providing benefits on an individual basis.

Key Benefits
  • Tax advantages for directors, shareholders and employees of small limited companies
  • Premiums are not taxed as benefit in kind
  • Available for spouse’s or employee’s cover, if they receive remuneration from the business by way of salary, dividend or both
  • Premiums are an allowable company expense for corporation tax purposes for the employer
  • Cover ranges from 15-30 times annual salary and/or dividends, depending on age. Younger people can apply a higher factor of salary (but usually earn less so this creates consistency)
Advantages for Business Owners
  • Tax advantages for directors, shareholders and employees of small limited companies
  • Premiums are not taxed as benefit in kind
  • Available for spouse’s or employee’s cover, if they receive remuneration from the business by way of salary, dividend or both
  • Premiums are an allowable company expense for corporation tax purposes for the employer
  • Cover ranges from 15-30 times annual salary and/or dividends, depending on age. Younger people can apply a higher factor of salary (but usually earn less so this creates consistency)
Income Protection

Income Protection pays you an income if you become ill or injured and, as a result, are unable to work. You decide the amount of income, or Benefit, you wish the plan to pay and for how long it's paid for, the Term.

The Insurance Company set maximum limits to the benefits payable, typically between 55% and 80% of your earnings. This considers the tax and NI that you would pay on earnings. It also gives you an incentive to return to work as soon as you are well enough.

The monthly benefit doesn't usually kick in straight away; it starts after a preselected time period since onset of illness, the Deferred Period. The preferred deferred period is typically 3 or 6 months although you can select 1, 2, 3, 6 or 12 months.

If a claim is successful, the policy will pay the benefit until you return to work or, if you don't, until the end of the term. If you don't claim on the policy you will get nothing back.

BUSINESS OWNERS – Executive Income Protection policies are available to Limited company business owners and can offer more favourable terms in certain circumstances. Executive Income Protection policies are paid as an off-settable expense through the business but insurance payouts are received by the business and must be treated in the same way as turnover to the business. They allow applications up to 80% of gross combined earnings (salary plus dividend and will consider spouse’s income from the business provided that the spouse does not require an Income Protection policy).

Critical Illness Cover

A Critical Illness policy pays out a lump sum on diagnosis of a critical illness or accident which has resulted in injuries of a certain severity (e.g. brain damage, significant loss of mobility, loss of limb, eyesight etc.) This fast cash input will always prove useful but it not the most satisfactory solution for younger people with a significant predicted working life ahead of them to (Income Protection policies are more affordable and effective for long term protection planning).

All insurers in the Critical Illness market include a core list of illnesses (as defined by the Association of British Insurer’s (ABI)). These comprehensive lists all cover the vast majority of significant situation’s that are considered Critical. It is then up to the insurer to decide which additional illnesses are covered. At first glance some insurers appear to cover many more illnesses, but these policies sometimes pay only a fraction of the insured amount for minor illnesses – PLEASE SPEAK TO US ABOUT THIS – we’re here to advise, some policies are better than others – cheapest isn’t always best!