Relevant Life Insurance for Directors
Save money, reward your employees and protect your loved ones
Make your life insurance work harder for you and your family.
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Why choose Relevant Life Insurance for directors?
Relevant Life Insurance is an excellent option for directors and their employees, offering substantial benefits beyond that of traditional life insurance. It provides a valuable death-in-service benefit, which not only helps to ensure your employees feel valued and engaged but also gives them peace of mind knowing their families are financially protected. It also also saves you money by converting your monthly premiums into legitimate business expenses. Since the premiums aren’t subject to National Insurance contributions or considered a benefit-in-kind, the savings can be even greater. Even better, you can claim Corporation Tax Relief on the premiums, adding another layer of financial efficiency. When it comes to the payout, this is also tax-free and can be used for any purpose, giving you and your employees the assurance that flexible funds will be made available when they’re needed most.
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FAQs
Am I eligible to take out a Relevant Life Insurance policy?
You must have a limited company to benefit from the tax savings that a relevant life insurance policy offers. If you do not have a limited company then standard Life Insurance will offer you the protection you need.
Do I get any money back if I don't die before the Relevant Life Insurance policy term ends?
No. There’s no cash value at any time. Just like standard Life Insurance at the end of your Relevant Life Insurance policy term you stop making payments and your cover ends.
Can my mortgage be covered with Relevant Life Insurance?
If you have an interest-only mortgage, your outstanding mortgage loan stays the same until you repay it at the end of the mortgage term. Level Relevant Life Insurance could cover this type of mortgage.
How does Relevant Life Insurance work? What do I need to know?
Like standard Life Insurance, it provides your loved ones with a large tax-free, one-off payment, or monthly payments if you pass away. It can be used to pay the mortgage off or help your family with living expenses. You are covered only for the duration (term) of the policy and cover only lasts while you keep up monthly premiums. Monthly payments can be reduced by combining this with a Critical Illness policy.
The key difference between Life Insurance and Relevant Life Insurance is that with Relevant Life Insurance the cost of the premiums is moved from your own pocket to your company expenses. This saves you tax and reduces the cost of your monthly premiums.
Additionally, this is not treated as a benefit-in-kind; the premium is not included as a P11D benefit, nor are premiums subject to National Insurance payments for the employer or employee.
There is significant tax relief with a Relevant Life plan and your business can claim Corporation Tax Relief on the premiums. Plus, the payout itself is tax-free.
What is Terminal Illness Cover?
Terminal Illness Cover will pay out when you contract an illness/ disease that has no known cure or has progressed to a point where it cannot be cured, and you aren’t expected to live longer than 12 months.
What's the difference between Relevant Life Insurance and Over 50s protection?
The main difference is that Relevant Life Insurance is a tax-efficient term policy, so it covers you for a specific amount of time, while over-50 life insurance is a whole of life policy, so it covers you for the rest of your life.
Typically to take out a Relevant Life Insurance policy you need to be aged between 18 and 77 to apply, and your coverage stops at the end of the policy term. You choose a cover amount, and if you want your cover to remain the same, be protected from the effects of inflation, or decrease over time broadly in line with a repayment mortgage or loan. You can take out a single or joint life insurance policy.
If you’re not sure which one might be right for you, speak to a Broadbench financial adviser.
What’s the difference between Relevant Life and Life Insurance?
Life Insurance is cover that you pay for with your own money. However, if you are set up as a limited company, you can pay for your Life Insurance through your business, as a tax-deductible expense, saving you 20%. This is known as Relevant Life Insurance.
How can I set up a Relevant Life Insurance policy?
If you’re looking to set up your Life Insurance, our advisers can help you find the right policy for you and your family. Get in touch.