For many dentists operating as a Limited Company, arranging life insurance is viewed as a personal expense. You likely pay your premiums out of your post-tax income, meaning you’ve already paid corporation tax, income tax, and potentially National Insurance on the money used to fund the policy. This is an inefficient way to protect your family.
The Relevant Life Advantage
If you are a director of your own limited company, there is a significantly more tax-efficient alternative: Relevant Life Insurance.
A Relevant Life policy is a death-in-service benefit designed specifically for company directors and their employees. The crucial difference is that the policy is paid for by the business, rather than from your personal bank account.
Because the premiums are treated as an allowable business expense, they are generally eligible for corporation tax relief. Furthermore, the premiums are not treated as a P11D benefit-in-kind, meaning you do not pay additional income tax or National Insurance on them. The payout is made through a discretionary trust, meaning it is usually free from Inheritance Tax and pays out quickly to your beneficiaries.
Seeing the Savings
The tax savings can be substantial, often making a Relevant Life policy significantly cheaper to fund than a standard personal life insurance policy offering the same level of cover.
Use our Medical Practice Relevant Life Insurance Calculator to compare the costs side-by-side and see exactly how much your practice could save.
Structuring your protection efficiently is just as important as the cover itself. By utilising your company structure, you can provide vital security for your family while keeping more money within your business.
Discover more on our Relevant Life Product Page or read our detailed guide on Relevant Life Insurance for Dentists.
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