In this week’s article, we’d like to share some commonly asked questions relating to Relevant Critical Illness & Life Policies from our contractor clients;
Q. Can I take this cover with me if I stop Contracting?
A. Yes, if you decide to hang up your contractor hat, the cover is transferrable – it can be transferred to you personally or another Limited Company (subject to Ltd Company qualifying criteria).
Q. Will the cover be paid to myself/family and not my company in the event of a claim?
A. Yes, the cover will be moved outside of the company’s hands via a Trust. This will ensure the claim is paid to the right people both quickly and tax efficiently.
Q. What is the maximum term I can take the cover over?
A. The maximum term is 40 years, up to a maximum age of 75 for both life & critical illness cover.
Q. What is the maximum amount of cover I can take?
A. This will depend on your age upon application and remuneration, taking into account dividends and PAYE salary, ranging from 15x to 25x.
Q. How do I claim this as a business expense?
A. Simply provide our certificate of insurance to your accountant along with all your other year expenses.
Q. I have a death-in-service scheme as part of a group membership, how is this cover different?
A. Death-in-service schemes (DIS) although reasonably priced, leaves you vulnerable to lifetime pension allowance tax @55%. Currently the allowance threshold is £1M, which your DIS pay out may form part of. Whereas, a Relevant Life Policy does form part of your lifetime pension allowance.
To find out more about Relevant life & critical illness insurance, contact us at C&D Business Protection Specialists on 0330 043 4321 or visit our website.
This article is provided by C&D: Business Protection Specialists.