Director's Life & Critical Illness Insurance

[xjr13m]

Hi, I'm the director and sole employee of my limited company, I need life insurance and critical illness cover and I believe it would be more tax efficient to do this through my company rather than personally. Rather than trawl through the internet I thought I'd come here to ask if anyone can recommend an insurance company or broker that they've had good dealings with, one that's used to dealing with people in my situation.

Thanks

 

[Mr D]

I looked into this last year, was more expensive to get cover through the company - from talking to a number of companies. I was looking at block cover for staff.
Not sure where my file is of the leaflets, will have a dig around later and see.

 

[MikeJ]

You also need to look at the tax implications of doing it through the company should it need to pay out. I'm going from memory here, but I seem to recall we had to do something odd with a trust to stop a payment being taxable.

 

[tony84]

You can only get Life insurance through the company. It is called Relevant life insurance. It is more expensive but then you get the tax benefits so it might be cheaper overall, but it might not be.

As far as I am aware you can not get critical illness through work unless you do a group policy which typically needs a minimum 2-5 people enrolled.

There are brokers who specialise in this sort of thing (im not one of them, but I did work for a life office 6-7 years ago so I know a little). If you put relevant life insurance in google, I am sure a few brokers will pop up.

 

[BCE]

Sole traders, unfortunately, don't get access to relevant life insurance because they themselves are the business entity. Key man insurance is probably better if you're looking to run it through the business. The premiums can't be offset against corp tax, but the payout is tax-free for your family so it can help to counteract any inheritance tax they would pay on the estate.

 

[SteveHa]

The tax implications follows from the terms of the policy.

Policy in company name
If the company pays the premiums, but the employee is the beneficiary then any payout is likely to be taxable. Premiums will be relievable in the company.

If the company pays the premiums and is beneficiary then there will be no tax to pay. However, in the event of a claim, any payment subsequently made from the company to the director will be taxed via PAYE. Premiums will be relievable in the company.

Policy in director's name
If the company pays the premiums then a benefit in kind will arise on the director in respect of those premiums. Any payout is likely to be tax-free. Premiums will be relieveable in the company

If the director pays the premiums and is the beneficiary then there are no tax implications.