The Old Way (Personal)
You take money out of your company (paying Corporation Tax, then Dividend Tax/Income Tax) to pay your premiums.
To pay a £100 premium, your company might need to earn £150+ in profit.
The New Way (Relevant Life)
A Relevant Life Policy is a specific type of term assurance policy available to employers to provide an individual death in service benefit for an employee (including directors).
The Benefits:
- Tax Deductible: It is usually treated as a business expense, reducing your Corporation Tax bill.
- No Benefit in Kind: Unlike private medical insurance, you pay no personal tax on the benefit.
- Not in Lifetime Allowance: The payout usually sits outside your pension lifetime allowance.
Savings Example
For a higher-rate taxpayer, switching to a Relevant Life Policy can save nearly 50% on the cost of life cover compared to paying personally.