And that your company can pay the premiums too?
Even better, this is an allowable business expense. Higher rate tax payers could save up to 50%!
Cover must cease by age 75 at the latest, the maximum amount of cover depends on your age and earnings at the time of application and Critical illness cover cannot be included.
Use this handy calculator to compare the cost of a Relevant Life Cover to the cost of an ordinary Life Cover:
The example below shows how a Relevant Life Policy can cut costs:
|Ordinary life cover||Relevant life policy|
|Company gross costs:|
|Employee's National Insurance contribution at 2%||£34||Nil|
|Income tax @ 40%||£690||Nil|
|Employer's National Insurance contribution at 13.8%||£238||Nil|
|Total company gross cost||£1,962||£1,000|
|Corporation tax relief at 20%||£392||£200*|
*Assumes that corporation tax relief at 20% has been granted under the 'wholly and exclusively' rules. In both cases we've assumed a payment of £1,000 each year for the life cover on an employee who's paying income tax at 40% and employee's National Insurance at 2% on the top end of income. We've also assumed that the employer is paying corporation tax at the small profits rate of 20% and will pay employer's National Insurance at the contracted-in rate of 13.8%.
Only 25% of business owners
have ever set up a Relevant Life Plan
and 63% have never even heard of a Relevant Life Plan!
Statistics from a 2013 Legal & General survey
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