Relevant Life Insurance
Many limited company directors us their limited company to obtain the “death in service” benefits due to its very tax efficient way to obtain medically underwritten life insurance. This protection unlike group life insurance is all about the insured and their health and lifestyle choices and could even be moved with them should their choose to change company or retire. Many would say this method of obtaining life insurance is 38% cheaper than looking at the same cover domestically due to the tax breaks. The solution can look like:
Relevant Life Insurance Level
- £500,000 of Term Life Insurance till 67 years
Life insurance designed to always pay the sum assured (£500,000) in the event of a life claim or terminal illness claim (within the term or time frame). However, the Business would pay for the solution not the employee. The business would be gaining the tax incentives and breaks vs corporation tax; the insured employee would ALWAYS have to nominate or TRUST the monies OUTSIDE the business to family or loved ones and this would also avoid further tax implications on their personal pension portfolio and estate. ZERO impact on P11D.
