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There are many reasons why people choose to become a Contractor- it can bring a lot of benefits; flexibility in working hours, high day rates and, subsequently, a high income. Of course, all of this is usually done with family in mind. We all want to provide our loved ones with the highest quality of living and lifestyle we can. It’s also true though that Contractors can lose out on a lot of the benefits that being ‘traditionally employed’ offers and that protect you and your family in a variety of scenarios; benefits like sick pay, contribution to your pension and cover for legal liabilities.


With these insurances no longer being provided by an employer, it becomes even more pertinent for Contractors to consider the protection measures they have in place to ensure they can keep protecting their, and their family’s, way of life. To be able to have the right amount of cover that enables this to happen, and at the most reasonable price, is of course an important consideration within this.


Well, there’s one little-known money saving protection benefit that Contractors are afforded as directors of their own LTD company and it’s called Relevant Life Insurance. 


Essentially, Relevant Life Insurance was put in place to afford small businesses the opportunity to benefit from the same money saving tax breaks large corporations enjoy through group life schemes. More simply, it’s life insurance that’s tax efficient for Directors (or employees) of LTD companies. 


To unpack the value that Relevant Life Insurance brings, let’s use the example that you own your own company and pay £100 a month from your own pocket and post-tax income for life insurance. The likelihood is that it’s costing your company more than it should. 


For starters, if you’re a 40% taxpayer, there’s income tax and 2% employee national insurance contribution, plus 13.8% employers’ national insurance contribution. 


In fact, after 19% corporation tax relief, the net cost to your company works out at £158.93 per month for you to pay for the policy personally.


With Relevant Life Insurance you can make considerable savings in what you are paying by expensing your life insurance through your company. If you pay £100 a month for a Relevant Life Plan you won’t pay any national insurance contributions or income tax on the premiums but you still get the 19% corporation tax relief, making the net cost only £81 per month.


That’s a huge saving of £77.93 a month or £935.16 over the year.


The funny thing is that not many people know about this tax efficient way to pay for life insurance. So, with those tax-savvy savings in mind, visit Relevant Life Expert to speak to one of their advisors and discover if Relevant Life Insurance is right for you.