TAX FREE LIFE COVER

DO YOU QUALIFY?

Please answer these quick questions to see if you qualify for HMRC approved Relevant Life Cover

what is relevant life insurance?

Relevant Life Insurance is a tax-free way of providing the loved ones of a Director/Employee with a cash lump sum in the event of their death.

It is effectively an individual Death-in-Service benefit and can benefit specified Directors/Employees of Limited Companies.

Premiums are paid by the Company, but the policy is placed in a Trust which ensures that, in the event of death, the chosen beneficiaries receive a tax-free cash lump sum without lengthy probate delays.

Substantial levels of cover are available based on multiples of the Director/Employee’s annual remuneration.

Relevant Life Insurance is HMRC approved*

* It must meet legislative requirements so that the plan can qualify for certain tax benefits. (Directors must be employed in their Limited Company)

HOW DOES RELEVANT LIFE COVER WORK?

As with a personal life insurance policy, the premium is based on a number of factors:

Age

Smoker status

Sum insured

Financial information

Medical & lifestyle information

Term of cover

Cover is available to a maximum age of 75 years. Sum insured can be up to 35 times annual remuneration dependant on age. If the insured Director/Employee dies during the term of the cover, a tax- free lump sum is paid to their chosen loved ones.

If the Director/Employee leaves the Company, or the business is sold, the policy can be transferred into the individual’s name, and life cover continued, as long as premiums are maintained.

RELEVANT LIFE features

Family life cover paid by the Limited Company

Premiums are Corporation Tax Deductible

No NI cost / No P11D benefit in kind

Benefits don’t count toward pensions annual or lifetime allowances

No Inheritance Tax Liability

Cover placed in Trust to chosen Beneficiaries

HMRC approved and recognised

Maximum age at expiry of cover 75 years

personal policy & relevant life plan comparison

COMPARING THE REAL COST OF A PERSONAL LIFE POLICY TO A TAX-FREE RELEVANT LIFE PLAN FOR A SALARIED DIRECTOR/EMPLOYEE *

personal life policy relevant life policy
Annual Premiums
Premiums can be paid monthly
£1000 £1000
Employee NI
National Insurance (assuming 2%)
£34.48 £0.00
Employee Tax
Income Tax (ASSUMING 40%)
£689.65 £0.00
EMPLOYER NI
National Insurance (ASSUMING 13.8%)
£237.93 £0.00
EMPLOYER TAX
CORPORATION TAX (ASSUMING 19%)
-£372.79 -£190.00
total cost £1589.27 £810.00

A SAVING OF £77.92ALMOST 50%
*Source Legal & General 2019 using Corporation Tax Rate at April 2021.

RELEVANT LIFE IS CORPORATION TAX DEDUCTIBLE. AND NO P11D BENEFIT IN KIND CHARGE TO THE EMPLOYEE.

about what life

The Directors of What Life jointly have over 60 years’ experience in the Financial Services market.

Our Business Life insurance clients are dealt with exclusively by the senior management of What Life who are specialists in these products, and can also advise on Key Person cover, Shareholder Protection and Business Loan protection.

No fee is charged for our advice and we are remunerated by our product providers only once a successful application has been made and cover secured.

At What Life we pride ourselves in giving first class administrative support for clients throughout their application and we help to make the process as efficient and speedy as it can be.

We work with a panel of the UK’s leading life insurers to find the best possible products for each application.

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