NU Protection - Relevant Life Cover

Relevant Life Cover

If you are a director of a small company then you should be aware that you and your employees could save up to 50% on your life insurance.

"Your could save up to 50% on your life insurance"

Most directors we speak to are unaware of what's known as a 'relevant life insurance policy'. Such policies are for all intense and purposes the same as a standard life policy. The insurance is still provided by major providers such as Aviva and AIG and the cover pays out to your loved ones. From the perspective of the policyholder, the only difference is the premiums are entirely paid by the company.

In itself, a company covering the cost of personal life insurance is a major benefit. However, it gets even better, the premium payments are currently treated as a fully tax-deductible business expense. Therefore premiums are treated as any other business expense and unlike medical insurance, it is not treated as a benefit in kind, so there is no further personal or company tax liability.

How Much Can You Save?

Individual and corporate tax situations vary greatly. But for the sake of simplicity, let's assume the policy holder is a higher rate tax payer and below the current retirement age.

For simplicity let's assume the life insurance premiums are £100 per month, the total cost of paying this through money receive by PAYE would be £156.97. When the premiums are covered by the company and we account for the tax saving, the total cost is just £80. This works out to a net saving of 49% or £923 per year

How can relevant life be set up?

In order to benefit from the savings there are some conditions that a relevant life insurance policy must meet:

  • It must be written into trust. We recommend this for all of our life policies not just relevant life
  • It must end by the time the employee is 75
  • It can only cover an employee of the company
  • It can not include critical illness

We make the whole process simple

At NUProtection we take care of all the paper work for you at no extra cost. Therefore, from our customers prospective putting in place a relevant life policy is not any different from taken out any other from of life plan.

Get your free review and Quote

If you have life insurance or are considering taking out life cover, then get in touch today for a free review to see how much you can save.