The importance of life cover for key employees, including directors and director/shareholders cannot be over emphasised. Of course, the more valuable the employee, the more expensive the premium is likely to be with a good rule of thumb for life insurance cover being 7 x annual salary.
However, one benefit of the current tax regime is that life cover, if taken out by the company, can be treated as an expense for tax purposes and is therefore allowable against corporation tax.
For this to work, the company must be limited liability and the legislation does have some limits to qualify for the tax concessions, and to ensure these are met, it requires that:
- The cover must be paid in a single lump sum before the age of 75
- Only Death & Terminal Illness benefits can be provided
- Benefits must be paid through a discretionary trust
- Beneficiaries are normally restricted to family members and dependants.
It is also important to consider putting your life cover in trust so that any payments made under your policy are made quickly and are excluded from your estate for the purposes of Inheritance Tax.
For more information speak to a life cover adviser on 01628 507477 or contact us .
Recent posts
According to Nationwide Building Society’s latest House Price Index, house prices dropped 0.6% month on month in May – the first monthly decline this year.
Best UK Mortgage Rates this Week
5 days ago
Here are the lowest fixed mortgage rates of the week, available to first-time buyers, home movers, buy-to-let, and those remortgaging.
Call us for more information: 01628 507477 or email: team@mortgagerequired.com.
Most Affordable UK Spots for First-Time Buyers
14 days ago
Research from Lloyds identifies the most affordable areas in the UK for first-time buyers to be able to get onto the property ladder.
On Wednesday, 13th May, King Charles delivered his speech at the House of Lords, outlining the government’s plans for the upcoming year.
Here is a summary of the housing and energy/environment points.
From 18th May 2026, Halifax (part of Lloyds Banking Group) is launching a ‘£5k Deposit mortgage’ to help first-time buyers get onto the property ladder sooner.
Homeowners could be faced with paying over £3,000 more per year on their mortgage if the conflict in the Middle East continues, following new analysis from INTEREST from Moneyfacts.
Renters' Rights Act
28 Apr 2026
The Renter’s Rights Bill became law at the end of October, which means it has been signed off by the King, and it is now the Renters’ Rights Act. Despite this becoming law, these changes are likely to start changing within the next six months, with the aim of being fully implemented throughout 2026 and into 2027.
Green Mortgages | Rewards and Benefits
28 Apr 2026
Mortgage lenders are starting to recognise their “Green” responsibilities when it comes to the different products they offer.
More information
Trusted by
