What is company directors' life insurance?
When thinking about life insurance, one of the 'perks' of being a company director or business owner is the ability to take out life insurance cover through the company. A further benefit is that apart from your life insurance is paid by the business, it is also potentially a more tax-efficient way of obtaining life insurance for company directors.
Also known as relevant life insurance, a company director's life insurance policy is usually written in trust, meaning that in the event of the director's death, a cash benefit is paid to the director's beneficiaries.
Who can benefit from company directors' life insurance?
If you are the owner of a business or company, whether you are paid in dividends, by PAYE salary or a combination of both, you may be eligible to secure life insurance for yourself, and other company directors in your business in a similar situation.
The premiums for a company director's life insurance policy are usually paid by the business as an allowable business expense.
The net cost to the individual company director using this arrangement is significantly lower than when paying for a standard personal life insurance policy via the company account.
This difference is greater still when a company director life insurance premium has been paid for out of post-taxed income and even more so for higher-rate tax payers.
Frequently asked questions
What does company directors' life insurance cover?
Depending upon the terms and conditions of the life insurance policy, the most usual benefit of a company directors life insurance policy is a cash, lump sum payout following the death of the policyholder. It is also often the case that the life insurance company will agree to pay out the sum insured under the policy in the event of a terminal, end-of-life diagnosis for the company director policyholder.
I'm a company director - how can I get life cover?
As long as you are a company director and your company is structured correctly to pay for the life cover, even if you are the sole director of the business, you should be eligible for director's life insurance.
QuoteRack can help you to obtain quotes for your company director life insurance; we partner with a specialist independent financial adviser who has many years' experience in arranging cover for business executives. Whatever sum insured you are considering, the term of the policy and benefits you require, you will be provided with appropriate, FCA-regulated advice.
What other benefits are available to me as a company director?
A lot will depend upon your individual circumstances, but among the financial benefits available to you as a company director are:
How much is company director life insurance?
The cost of directors life insurance will depend upon a number of factors, as would any life insurance policy. These factors include:
Will I need to have a medical for directors life insurance?
The majority of people who apply for life insurance are not required to have a medical. While all life insurance applications are considered on their individual merits, in some circumstances, for example a high value life insurance policy or the disclosure of a pre-existing medical condition, you might be required to have a medical examination.
This procedure does not necessarily mean that your application for directors life insurance will be rejected.
It is also important, when completing the application form for life insurance, that you provide full details of any and all aspects of your health record. However minor the illness or condition, you should put details on the application form.
Again, depending upon your individual circumstances as a company director, it is likely that the life insurance company to which you are applying for life cover will ask your permission to ask your GP for details of your medical history. If you fail to mention in your application form something that your GP confirms to the life insurance company, it is possible that your application for directors life insurance will be declined or refused..
How can I get a quote for company life insurance?
When you click the 'GET A QUOTE' button, completing the online form will send your contact details to an independent financial advisor, who is authorised and regulated by the FCA. He will contact you by phone and/or email to discuss your application in more detail.
If you wish to proceed with an application for company director life insurance, he will guide you through the initial steps without cost or obligation.
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"As the director of a limited company and a higher-rate tax payer, I found I was eligible for significant savings in the premiums being paid for my director's life insurance"
"Specialist advice should be taken before any decision is made about whether a limited company's director's life insurance should paid by the business"