Life cover for company directors, paid for by your company
If you run your own limited company, Relevant Life Cover lets the company pay for life cover on you personally. For many directors that works out more efficient than paying for it out of your own taxed income. Send a few details below and Debbie will call you to talk it through and get you a quote.
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Debbie will call you at the time you picked.
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- Debbie will call you to talk it through
- There's no obligation to go ahead
Need us sooner? Call 0330 22 333 10
Built for limited company directors
Relevant Life Cover is designed for a specific situation, so it's worth checking it actually fits yours before you dig into the detail.
Director of your own limited company
Whether you're the only director or run the business with a small team, you can usually be covered, provided you're treated as an employee of the company for tax purposes.
Contractors trading through a company
If you work through your own limited company rather than as a sole trader, Relevant Life Cover is typically available to you in the same way as any other director.
Small teams without a group scheme
Many insurers want a minimum headcount before offering a group life scheme. Relevant Life Cover fills that gap for companies with just one or two people on the payroll.
Relevant Life Cover isn't available to sole traders or equity partners, because it needs an employer to take the policy out on an employee. If that's your situation, Debbie can talk you through personal life cover instead.
In plain English
Your company takes out the policy and pays the monthly premium, not you personally. If you die, or are diagnosed with a terminal illness, while you're still working for the company and the policy is in force, it pays out a lump sum to your family.
"For a lot of directors I speak to, this is the first time anyone's explained that the company can pay for their life cover. It's not complicated once you see how it fits together, and for many directors it works out more efficient than paying for cover personally."
A simple example
Say you're the director of a small limited company. Instead of taking extra salary or dividends to pay for life cover yourself, after tax has already been deducted, the company pays the premium directly as a business cost. The exact tax treatment depends on your company's circumstances and HMRC's rules at the time, so it's always worth checking with your accountant. For many directors though, it means more of each pound goes towards the cover itself.
Why directors choose it
Relevant Life Cover was built with company directors in mind. These are the main reasons it's worth a look.
Company pays, not you
Premiums are paid by the company rather than from your own taxed income, which for many directors makes cover more cost effective.
Normally outside your estate
Written in trust from the outset, the payout is normally paid directly to your chosen beneficiaries and kept outside inheritance tax calculations.
No effect on pension allowances
Because it isn't a pension benefit, Relevant Life Cover doesn't use up any of your pension allowances.
No P11D benefit-in-kind charge
In the normal case, the premiums aren't treated as a taxable benefit on you personally, unlike cover paid for in other ways.
One life, one policy
It's designed around a single director or employee, so there's no need for a group scheme or a minimum headcount.
Flexible level of cover
Cover is usually based on a multiple of your salary and dividends, with the exact amount set by the insurer once they've underwritten your application.
Worth knowing before you apply
- Cover normally ends if you leave the company, retire, or the company stops trading, so you may need to arrange new cover if your circumstances change.
- It isn't available to sole traders or, in most cases, equity partners, because the policy needs an employer to set it up on behalf of an employee.
- Tax treatment depends on your company's and your own circumstances, and on HMRC's rules at the time, so it's worth checking the detail with your accountant.
- As with any insurance policy, cover and premiums depend on underwriting, and a payout isn't guaranteed. It depends on the policy terms being met.
- If premiums stop being paid, the cover can lapse.
Three steps to get set up
A quick conversation
Debbie talks through your company structure, how many of you there are, and what you're trying to protect, so the cover fits your situation.
Whole of market comparison
She compares providers across the market for suitable cover and a likely premium, rather than offering just one insurer's policy.
Policy set up properly
Debbie arranges for the policy to be written in trust and liaises with your accountant on the tax side, so the paperwork is one less thing for you to chase.
Relevant Life Cover, answered
Who can take out Relevant Life Cover?
It's available to directors and employees of limited companies, including contractors who trade through their own company. It isn't available to sole traders or, in most cases, equity partners, because the policy has to be set up by an employer.
How is it different from life cover I buy myself?
The main difference is who pays. With Relevant Life Cover, your company pays the premium as a business cost. With personal cover, you pay from your own income after tax has already been taken. The right option depends on your circumstances.
Does it affect my pension?
No. Relevant Life Cover sits outside your pension arrangements entirely, so it doesn't use up any pension allowances.
What happens if I leave the company?
Cover normally ends when you stop being an employee or director of the company that set it up, for example if you leave, retire, or the company closes. You'd then need to arrange new cover if you still want protection in place.
Will I need a medical?
You'll be asked health and lifestyle questions as part of the application, and depending on your age, health and the amount of cover, the insurer may ask for a GP report or a medical. This is the same as any personal life policy.
How much does it cost?
It depends on your age, health, how much cover you need and the term of the policy. There's no set figure. Debbie will get quotes from across the market once she knows your circumstances.
Ready to find out what it would cost?
Send your details below and Debbie will call you to talk it through and get you a quote. No obligation.
Thank you, we've got your details
Debbie will call you at the time you picked.
- Your details have gone straight to DS Financial
- Debbie will call you to talk it through
- There's no obligation to go ahead
Need us sooner? Call 0330 22 333 10