The UK’s £2.4 trillion Protection Gap

There is currently an estimated ‘protection gap’ in the UK of £2.4 trillion, with Income protection accounting for £200 billion per annum. There are a number of reasons for this gap; it is often the perception that life insurance is expensive, lack of awareness and ‘it won’t happen to me or the state will look after me’ attitude.

Do you fall into this GAP?

According to LIMRA’s Life Insurance Barometer study, 41 percent of business owners and contractors do not have life insurance, meaning they likely don’t have the necessary funds earmarked to support their business, employees and their loved ones in the event that something happens to them.

Life & Critical illness cover isn’t as expensive as you may think, admittedly critical illness is the most expensive element, however, you can keep the price down by taking different levels of cover.

Let’s have a look at some example figures,

Age Life Insurance Amount Critical Illness Amount Monthly Premium
30 £250,000 £75,000 £36.76
40 £250,000 £75,000 £58.87
50 £250,000 £75,000 £103.01

* The above figures are based on a male non-smoker, level term to age 65, guaranteed premiums.

The critical illness amount includes life cover as standard, so, if the first event was death both policies would pay out a total of £325,000, if the first event was diagnosis of a critical illness, the £75,000 policy would pay out, if death subsequently followed the £250,000 policy would then pay out.

Some good news for limited companies and limited company contractors, they can cease altogether their personal spend for life & critical illness cover and divert the cost to the limited company. Premiums are classed as an allowable business expense, claims paid out tax free, with no P11D exposure, with costs up to 49% cheaper than paying for cover personally.

To find out more about this tax efficient life & critical insurance, contact us at C&D Business Protection Specialists on 0330 043 4321 or visit our website


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