Business Life Insurance Experts

If you own your own business, it may be prudent to have some form of business life insurance in place. Many business life insurance policies are more tax efficient to pay for as a business life insurance policy rather than a personal life insurance policy. HMRC have granted special permissions to company owners to claim both corporation tax and income tax relief on specific policies such as relevant life insurance and executive income protection, both of which can provide a high level of protection for directors and business owners.

The consequences of the death of a business owner on their families are catastrophic, so having some form of life insurance in place is essential. As a business owner, why not let the business pay for this cover? Equally, if you should have an accident and are unable to work for a period of time, an income protection policy that continues to pay you your salary whilst you recover could also be a great asset, again with the company meeting the cost of premiums and claiming tax relief.

With the question “do you need business life insurance”, it is not a requirement, but for most business owners, it would be wise to have it in some form.

How much business life insurance costs depends on the kind of life insurance policy taken out. For example, a very popular choice for company directors is a relevant life insurance policy. A relevant life policy is paid for by your business as a qualifying expense, meaning that you can claim corporation tax relief on the premiums in order to reduce your annual corporation tax bill. The benefit is for your family and, if you should die, they would receive the benefit amount, tax-free. The cost for a 40-year-old, non-smoker, insured to age 65 with a benefit of £1 million would be just £60 a month, paid by the business with no benefit in kind.

Premiums for other business life insurance policies, such as shareholder protection or key man insurance, are also a similar price.

Executive income protection is also more affordable than you might think. The same 40-year-old, non-smoker insured to age 65 on a salary of £80,000 a year could insure 80% of this income with a 24-month limit for just £56 a month.

If you would like a bespoke quotation, we search every insurer in the UK market and present this information to you so you can pick the best insurer that offers the best value. Feel free to reach out to the Executive Life team and we will be happy to help!

Not all life insurance is a qualifying business expense. Relevant life insurance and executive income protection are the most tax efficient, as they both qualify for corporation tax relief with no benefit in kind.

Shareholder protection with a company share buy-back and key-man insurance has no benefit in kind tax, however, corporation tax can’t be claimed.

Private health care can be paid for by the business, however, benefit in kind tax will be charged to each member.

There are four main kinds of business life insurance. relevant life insurance, executive income protection, shareholder protection and key man insurance. They all have different uses.

Relevant life insurance is a policy that is paid for by the business as a qualifying expense and the benefit is for the member’s family personally. It’s a form of death-in-service benefit that you might have if you worked for a larger company, but it can be used for businesses of all sizes.

Executive income protection is a policy that can also be paid for by the business as a qualifying expense and will pay the business an income each month if the member is unable to work due to health-related reasons. This policy, used in conjunction with a relevant life policy, provides a great amount of protection for many company directors.

Shareholder protection is designed to provide the cash for a company to buy back the shares of a shareholder should they die. It means that the company remain in the control of the remaining shareholders and is very important for businesses where there are multiple shareholders.

Key man insurance cover is used so that, in the event of the loss of a key person, the business may suffer a short term decrease in income. This can be counterbalanced by using a key man policy that pays a lump sum to the business in the event that a key person either dies or become critically ill.

Many businesses require a combination of all of these policies to create a protection suite. For more information on how best to combine insurance policies to suit your business, contact us today.

Most company directors choose to start with a relevant life policy as this protects their family in the event of their death. Shareholder protection is also popular, as many businesses are owned by multiple shareholders, so having this insurance in place can be essential to ensure the smooth running of a business.

Executive income protection is important for businesses that rely on sales, or if they act as the main contract winner within the business, as if the director was unable to work, sales would stop and income would soon follow. The risk of this can be reduced by using executive income protection.

Finally, key man insurance can be prudent when select individuals in the business are responsible for the majority of sales or business income. If there were not around, then the business would suffer, so having a buffer of cash from a key man policy could be essential to the business's survival.