Drewberry™ provide pensions, investment and insurance advice for Money to the Masses readers throughout the UK.

drewberry relevant life insurance calculator

Relevant Life Insurance Calculator

Calculate your Company’s Tax Savings

Relevant Life Insurance is one of the most tax-efficient ways of providing life cover for an employee/director of a company. The premiums are paid for by a company and Relevant Life cover is often considered a tax-deductible business expense (providing you meet strict conditions when setting up the policy).

A company director in the 40% tax bracket could make significant savings on life cover by opting for Relevant Life Insurance over personal cover, because the tax-efficiency of Relevant Life Insurance means it works out cheaper than a personal life insurance plan. The Drewberry Relevant Life Calculator below will help you calculate how much you could save with Relevant Life Insurance.

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How does Relevant Life Insurance work?

Relevant Life Insurance is a form of Life Insurance paid for by a company, with the families of directors/employees as the beneficiaries of the policy. The company does not receive any of the payout from a Relevant Life Insurance policy – a company looking for such cover should consider Keyman Insurance, which is different from Relevant Life cover.

Relevant Life cover is usually an allowable business expense and can be deducted from companies’ corporation tax bills. The Drewberry Relevant Life Insurance Calculator can show the potential savings you and your company could see from using Relevant Life cover, especially if you’re currently paying for Life Insurance out of your own pocket.

Calculate your relevant life insurance savings

Also, as policy is written into a relevant life trust, the beneficiaries receive the payout from Relevant Life Insurance tax-free.

Moreover, Relevant Life Insurance premiums are not treated as a P11D benefit and don’t have any National Insurance implications for either the employee or the employer. Drewberry’s Relevant Life Insurance Calculator will take into account all of these deductions for you.

Remember, for Relevant Life Insurance to retain its tax-efficient status, strict conditions need to be met to keep HMRC happy.

There must be no Critical Illness Insurance attached to the Relevant Life policy, and the primary aim of setting up the cover can’t be seen to be tax avoidance.

Jeremy Cornford
Business Protection Expert at Drewberry

Providing all those conditions are met, though, Relevant Life cover can be an incredibly tax-efficient method of providing life protection. It can offer:

  • Life Insurance to small business owners who want to cover their employees
  • Life Insurance for higher earners who are looking to avoid their death-in-service benefits becoming part of their lifetime allowance for pension purposes
  • Life Insurance for directors of small companies who currently use their personal income to pay for life cover.

If any of the above apply to you, then it’s worth calculating the cost of Relevant Life Insurance to work out how much you could save.

 

Calculate your Relevant Life Cover savings

Relevant Life Insurance offers corporation tax relief, no implications for National Insurance contributions for either the employer or the employee, and tax-free payouts to beneficiaries.

That means calculating the cost of Relevant Life cover compared to personal or ‘normal’ life cover is mostly a series of deductions! Why not try the Drewberry Relevant Life Cover Calculator to see what you could save?

 

Relevant Life Insurance Calculator

Calculate the tax savings you can make by choosing to take out Relevant Life Insurance and have your business pay the premiums instead of setting up a personal Life Insurance policy.
1
Your Monthly Premium
£
2
Is the premium paid from dividends ?
3
Your Highest Rate of Income Tax Your Highest Rate of Dividend Tax

Some assumptions have been made as to the relevant tax rates, please update accordingly if you are taxed at an alternative rate.

Corporation Tax Rate
Employer National Insurance Rate
Employee National Insurance Rate
4
Your First Name
5
Email Address Enter your email address for your summary report and our exclusive 'Directors guide to tax efficient insurance products' e-guide.
Required Field

Without agreeing to our terms and conditions and privacy policy we are unable to process your calculation and provide you with any results.

Your Relevant Life Tax Savings

Personal Life Cover
Relevant Life Cover
Cost to Individual
Premium
£0.00
Employee National Insurance
£0.00
IncomeDividend Tax
£0.00
Cost to Business
Premium
£0.00
Employer National Insurance
£0.00
Gross Cost
Corporation Tax
− 
Total Cost

By opting for Relevant Life Insurance over Personal Life Cover you would make savings of .

That is a saving of per month or per year.

victoriasladeportraitround

These calculators help but sometimes it doesn't beat talking to a human. If you need any support please do not hesitate to pop us a call on 01273646484.

Victoria Slade
Business Protection Expert at Drewberry

IMPORTANT NOTES

The tax treatment of Relevant Life Cover is based on the policy being wholly and exclusively for the purpose of trade. Cover can be offered to an employee as part of that employee’s remuneration package, which is competitive relative to what they could attract in the open market. The purpose of providing such a scheme must not be primarily to avoid tax.

Speaking to an expert adviser is highly recommended before entering into this type of arrangement to ensure the plan is set up correctly and you aren't falling foul of any tax rules. The team at Drewberry is here to help – just pop us a call on 01273646484.

Get expert, independent financial advice on Relevant Life Insurance from one of our advisers today

Need some help with Relevant Life Insurance?

Now you’ve calculated the cost of Relevant Life Insurance and found out how much you could save the next step is ensuring you keep all of those tax advantages.

There are a number of pitfalls that you mustn’t fall into to keep you on the right side of the HMRC rules for Relevant Life Insurance and retain its tax-efficient status. Our expert financial advisers are best-placed to help you navigate this area and set up the policy for you, including the necessary relevant life trust.

Why not give us a ring on 02084327333? We can help you with all of your Relevant Life Insurance needs.

Compare Top 10 UK
 Protection
Insurers
 
Takes approx. 60 seconds
Type of Cover
Level of Cover
Date of Birth
Loading your options...
Thank you for using our Quote Tool
If you need some help, just call us!
T: 02074425880
Our in-house Experts are here to provide FREE impartial advice!
Our Experts can answer all your questions
Our Experts can send you more appropriate options based on your personal circumstances

Very important if you are either Self-Employed or a Company Director.

Our online quote tool is good but our Experts are better

Oue Experts have access to far more insurers and can often find a better deal offline.

Saves you time, let our Experts do what they are best at

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