26 Oct Good news for contractors!
Did you know that Limited Company Contractors can now pay for their personal Life & Critical Illness Cover through the business?
Many contractors are looking at switching to a new product called Relevant Life & Critical illness cover because it’s much more cost-effective than paying for the cover personally. Those that have had personal cover have found they will either save money on what they are paying now or, for the same monthly premium, increase their cover meaning their families are better protected.
Here is the good news:
• The limited company pays for your life & critical insurance premiums – not you.
• The limited company can claim Corporation Tax Relief on the premium payments saving 20%.
• The premiums are not classed as a benefit-in-kind or a P11D benefit.
• The proceeds go directly to the employee during a critical illness event or the employee’s family / financial dependants in the event of a life claim.
• The benefit payment does not count towards your annual or lifetime pension allowances.
• Premiums can be up to 49% cheaper than paying for the cover personally.
• Benefits usually free from inheritance tax.
• The cover will be written into a trust, keeping the payment outside of your estate, avoiding probate and allowing the benefit to be paid to the people you want it to go to.
As you can see, the benefits of a Relevant Life & Critical Illness plan are obvious to see.