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As you’ll be well aware, when you work for yourself, you no longer automatically enjoy the financial security that being employed affords you; from sick pay to pension provisions and death in service benefits.
This means that the onus now lands firmly with your clients to financially protect themselves, their loved ones, their business and their future. Of course, this has a cost, as with all protection products, but there is one tax efficient benefit afforded by HMRC to limited company directors and their employees; it’s called Relevant Life Insurance.
Relevant Life Insurance is a policy that affords contractor’s and limited company directors the same benefits that big businesses enjoy. It’s essentially a life insurance policy that is taken out by a limited company director to provide a ‘death in service’ benefit for themselves or an employee. Though it’s paid for by an employer, the policy pays out directly to the employee’s beneficiary in the event of their passing.
There are many similarities between Relevant Life Insurance and ‘regular’ Life Insurance, as both policies will pay out to ones family when the policyholder passes away. The difference being that Relevant Life Insurance is designed as a benefit for contractors. It’s a tax efficient way to pay for life insurance as, instead of paying for it out of post-tax income, Relevant Life Insurance is paid for through the limited company as a business expense – saving money.
We understand that insurance is considered a grudge purchase but it is often the case that contractors and limited company cirectors are the primary earners in their family, making protecting the financial future of their loved ones vital. To be able to do this tax efficiently is a benefit that not everyone is aware of that can save hundreds from an annual life insurance policy. Find out more below.
Broadbench are an FCSA Business Partner who can offer tax efficient Relevant Life Insurance, as well as other protection products to you and your clients. To find out more about Broadbench and the added value you can provide to your service by partnering with them, click here.