Many business owners across Hereford and Worcestershire still pay for life insurance personally, often without realising there’s a more tax efficient option available through their limited company. Relevant Life Cover is designed specifically for small businesses and single director firms, offering a simple way to provide death in service style benefits without the cost or complexity of a group scheme.
Relevant Life Cover is a life insurance policy paid for by your company. If you pass away or are diagnosed with a terminal illness, it pays a tax free lump sum to your family via a discretionary trust. Because the business pays the premiums, directors avoid using taxed personal income, and the cost is usually treated as an allowable business expense, reducing Corporation Tax. Crucially, premiums do not create a Benefit in Kind charge, meaning no Income Tax or National Insurance is due.
For many Chamber members running lean teams or single director limited companies, it’s one of the most efficient ways to provide meaningful protection. The payout normally sits outside your estate, helping your family avoid Inheritance Tax and receive funds quickly when they need them most.
Relevant Life Cover is simple, compliant, and often significantly cheaper than paying for personal life insurance. For directors wanting to protect their families using company funds rather than personal income, it’s an option well worth considering.
If any members would like a clearer understanding of how Relevant Life Cover could work for their business, please email me at [email protected]. Thanks.