Life insurance for directors is very much similar to personal insurance offers a huge amount of money in the event of your death. This lump sum is given to the selected beneficiaries chosen by you. Relevant Life Insurance is the option where directors can make the choice to pay through their company and not incur it personally. In Addition, the relevant life insurance for directors is a tax-deductible death benefit with numerous other benefits as well. The limited company owns and pays for the relevant life insurance for directors. This provides various tax benefits for all the parties such as employers, employees, and beneficiaries. In short, Relevant life insurance plans are more tax-efficient and are cost-effective for the directors when compared to personal life insurance. Most insurers will cover up nearly 30 times your net annual income which includes both PAYE and dividends.
Tax Benefits
Life insurance for directors is not a bonus or an advantage for the employees. Therefore, no income tax or national insurance is due for them. Henceforth, the costs of life insurance policy for directors are incurred by the firm and it is considered a business expenditure.
Transfer of Insurance
As the policy is funded by the employer, if you quit the company, the policy will have to be transferred to your new employer. In addition, there is another option where it can be altered to a personal policy, where the premiums are paid out of your income. Relevant Life insurance for directors helps small companies offer death service benefits to their employees even when they do not have enough employees to take up a group plan.
Benefits of Life Insurance for Directors
Life insurance for directors is a tax-efficient option for employees, employers, and beneficiaries. In other words, Life insurance policy for directors is not a benefit-in-kind. Hence, the costs for this insurance are completely incurred by the firm. As a result, no income tax or national insurance is due on their behalf. Furthermore, according to the local tax inspector, premiums qualify as a business expense provided they are justified and used solely for company reasons. As a result, there is a decrease in the company’s corporation tax expenditure. Any lump payment put into the trust for the beneficiaries is not subject to Income Tax. Therefore, the life insurance for directors does not have any Inheritance Tax.
Additional Benefits
- Video Or Telephone General Practitioner Services
- Counselling Services
- Adequate support for your loved ones in case of your absence
- Early release of funds to aid your family with funeral expenses
In short, this policy gives all the benefits of death-in-service insurance.
Top Companies that Offer Relevant Life Insurance
The well-known Contractor Advice website can help to determine the top health policy companies in the UK that provides relevant life insurance for directors. They provide you with the greatest entities in the industry to meet all of your concerns and make the right choice for you. Here is the Contractor Advice recommendation for you –
Aegon
Aegon is one of the best financial service providers in the UK with around 2000 employees. Moreover, the company is a division of Aegon N.V., an international life insurance company holding businesses in around twenty countries. They support over 3.9 million customers in the United Kingdom. In short, Aegon is dedicated to help people achieve long-term financial stability. They ensure provide the customers with the best life insurance for director packages.
Coverage
- Up to 35 yrs: 30 x Remuneration
- 36 yrs – 50 yrs: 25 x Remuneration
- 51yrs – 60 yrs: 20 x Remuneration
- 61+yrs: 15 x Remuneration
Moreover, For amounts less than £2,500,000, there is no requirement for financial documentation.
Legal & General
This organisation is one of the well-known financial services companies in the Uk. Legal & General was formed by lawyers in the year 1836. They are amongst the world leaders of protection with 185 years of experience and 10 million customers all around the world. You can get the best packages for relevant life insurance for directors at Legal & general.
Coverage
- 18 yrs – 49 yrs: 25 x Remuneration
- 50 yrs – 59 yrs: 20 x Remuneration
- 60yrs -73 yrs: 15 x remuneration
Furthermore, for payments less than £3,500,000, there is no requirement for financial documentation.
Royal London
Established in the year 1861, Royal London is the UK’s largest mutual life, pensions, and investment firm. They offer any life insurance policy to match your needs. This includes life insurance policy for directors, insurance for home, health, and more. In Addition, the Royal London Mutual Insurance Society Limited is the largest mutual insurer with countless divisions.
Coverage
- Up to 40 yrs: 30 x Remuneration
- 40yrs – 49 yrs: 25 x Remuneration
- 50 yrs – 59 yrs: 20 x Remuneration
- 60+ yrs: 15 x Remuneration
Zurich
Zurich Insurance Group is a global multiline insurer serving over 215 countries. The company began its journey in the year 1872 with its headquarters in Zurich, Switzerland. Furthermore, today, they have around 55,000 employees and provide great packages and insurance options including relevant life insurance for directors. There are around 20 divisions of the company only in the UK.
- 16 yrs – 39 yrs: 30 x Remuneration
- 40 yrs – 49 yrs: 20 x Remuneration
- 50+ yrs: 15 x Remuneration
Scottish Widows
The company Scottish Widows began in the year 1815 to support women and children whose father, brother, or spouse died during the Napoleonic Wars. As a result, the organisation is named on behalf of the people it was created for. Hence, the name Scottish Widows. After more than 200 years, they currently serve nearly 6 million customers across the United Kingdom. In short, the company Scottish Widow offers a wide variety of insurance services. It includes workplace and individual pensions, gratuities, life insurance, critical illness insurance, income protection, relevant life insurance for directors or contractors, savings, and investment, and much more.
Coverage
Minimum Coverage Age: 18 yrs
Maximum Coverage Age: 73 yrs
Maximum Coverage:
- Level Term: £25 million
- Increasing Term: £15 million (at point of policy inception, increases permitted to £30 million)
Conclusion
To sum up, It is very vital to get guidance when looking for Relevant Life Insurance for Directors. Experts at Contractor Advice can assist you with all your issues and doubts regarding life insurance policy for chief executives. Hence, the Contractor Advice was introduced to offer a well-deserved service regarding important aspects of our life such as securing our finance and health.
