Pay your life insurance through your limited company and save tax!

Danbro now have access to a product that allows you to protect your dependents in a way that mirrors the death in service benefits that you used to have as an employee of a large corporate and at the same time save you significant amounts of money when compared to more mainstream policies.

Contractors using a One Man Ltd company can transfer the cost of life insurance to your business rather than fund the cost personally from your post-tax income. It may also be possible to have this payment treated as a business expense.

What are the tax benefits?

Until recently employer funded life insurance was only available to large businesses in the form of a ‘group life’ scheme for all employees so this was not a realistic option for Contractors.

This innovative product provides a multiple of earnings (salary or dividends) as death in service benefit whilst possibly enabling you to exploit the tax deductable nature of the premiums that a large employer would enjoy.

It essentially does not affect your lifetime or annual pension allowances, so those Freelancers with a large pension pot are still be able to benefit from the lucrative tax relief on pensions contributions, whilst your life cover contributions now offer you a further opportunity to save tax. 

If you have a partner who receives an income from the company then you can tailor the policies to cover you individually. This offers complete peace of mind as you know that if anything should happen to you or your partner then your family will be protected. The only requirement is that your spouse must be an employee of the company, for example a company secretary and must receive some form of remuneration (i.e. dividends).

Is there a limit to the death in service I can provide?

The policy can cover you or any partner who earns salary or dividends for up to fifteen times your total remuneration from the company.

Example - if they receive £5,000 salary and £40,000 in dividends per year then you could be covered for up to £675,000.

This business life cover will pay out a lump sum in the event of your death up to age 75 and can offer you the peace of mind that your family, an individual or a charity of your choice will be looked after.

Even if you decide to return to permanent employment, you can still benefit from the tax savings by simply transferring your policy to your new employer. Your cover is kept in trust and this not only keeps the money safe from any liabilities that the company has but also makes the plan easier to transfer. You can also pay the policy personally.

Because this cover is transportable between employment types and between individual companies it really can stay with you for all your working life. Irrespective of any health issues that arise, you will not be medically underwritten again with this cover and so the cover can remain intact, providing continuity to the protection your dependents need.

Help when you need it most

We realise that your working day as a Contractor can be hectic so we have made the applying as easy as possible. The award winning protection advisers at ContractorFinancials can take your details over the phone in a matter of minutes and will handle the whole process for you until you are on risk with the protection that you need.

For more information speak to our dedicated Danbro in-house financial consultant; Chris James on 01253 600140, he will then put you in contact with the independent protection advisers at ContractorFinancials.

Financial advice is given by Contractor Financials, which is a trading name of Contractor Financials Ltd and is regulated and authorised by the Financial Services Authority.