As a business owner, you know how important it is to protect your company, your family, and your financial future. But did you know there’s a way to have life insurance that not only protects your loved ones but also saves your business money?
It’s called a Relevant Life Policy, and it’s one of the best-kept secrets for directors and high-earning employees.
What Is a Relevant Life Policy?
A Relevant Life policy is a tax-efficient life insurance plan that your business pays for-rather than you personally. It works like traditional life cover, paying out a lump sum to your family if the worst happens, but with one key difference: its paid for by your company and comes with big tax benefits.
Why Should You Consider It?
- Lower Costs: The policy is paid through your business, not from your taxed income.
- Tax Savings: Premiums are usually classed as an allowable business expense, meaning corporation tax relief.
- No National Insurance or Benefit in Kind Tax: Unlike salary or dividends, there’s no extra tax to
- Keeps It Out of Your Estate: The payout is typically outside of your estate for inheritance tax purposes
Real-Life Example: How Tom Saved Over 40% on His Life Cover
Tom, a 45-year-old business owner, was personally paying £150 per month for life insurance. His accountant introduced him to a Relevant Life policy, and here’s what happened:
- The business started paying the premiums.
- He saved over 40% in tax, reducing the actual cost of his cover.
- His family still had the same financial protection, but in a much more efficient way.
Is It Right for You?
If you’re a limited company director or a high-earning employee, a Relevant Life policy could be a smarter way to protect your loved ones while keeping costs down.
If this sounds like something you’d like to explore, let’s have a chat. I can help you understand if it’s the right fit for your business and how to set it up.
Why pay more for life cover than you need to? Let’s make sure your money is working harder for you.
This is a guest blog written by:
Rachel Edwards – Thrive Together Financial Planning
