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 .

Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be no fee for Mortgage Advice. There may be a fee for arranging a mortgage. The precise amount will depend upon your circumstances, but we estimate it to be between £399 and £599.

Mortgage Required Ltd, Finance House, 5 Bath Road, Maidenhead, SL6 4AQ is authorised and regulated by the Financial Conduct Authority reference 573718 at

The Financial Ombudsman Service is an agency for arbitrating on unresolved complaints between regulated firms and their clients. More detail can be found on their website: