Compare leading life insurance providers

Compare leading life insurance providers
- Compare the whole market
- Cheaper than buying direct
- Optional critical illness cover
While many businesses take out business contents insurance or public liability, few think to insure their staff. Business life insurance does just that – it protects your business financially if something should happen to your staff, your partners or you. We look at what’s included and how your business might benefit from it.
There are several types of business life insurance, each protecting different aspects of the business. We’ve detailed each type below, but some examples are key person insurance (which protects key members of staff in your business), business protection (which covers existing debts) and ownership protection (which supports you if something happens to your partner).
Business life insurance is not a legal requirement, but it can be a good idea, especially for smaller business owners and directors. What would happen to your business if you weren’t around anymore? And how would your loved ones cope with the financial impact?
If you have less than five employees, business life insurance can be a way of offering death in service benefits. It can also protect your interest in case your partner passes away, you lose a key member of staff or a vital part of your supply chain goes under.
There are five main types of business life insurance:
That depends on the policy and how the payout from it is used. If the payout goes back into the business as profit, then the policy is not tax deductible. If it counts as capital, then premiums can be declared as an expense.
For policies that cover an employee, the relationship between the employee and the business has to be that of employer and employee only. For shareholders, they must have a holding of less than 5% in the business. If you’re unsure how this affects your business, the best thing to do is to contact the HMRC directly.
The tax treatment of any payout is also unclear. Generally, if you received tax relief on the premiums, then the payout will be taxed. This is because it will be used to boost your profits, which will push up your corporation tax liability. If you did not receive tax relief on the premiums, then the likelihood is the payout will be treated as capital and not business profits and so won’t be taxable. Check with the HMRC if you’re unsure how your business is affected.
The best business life insurance for your company will depend on your personal circumstances and what type of cover you’re after.
However, there are a few steps you can take to help you find the best cover for you:
Business life insurance can be a valuable protection for you and your business in many scenarios, including when a key member of staff, a shareholder or a business partner dies. It can sometimes mean the difference between your business staying afloat and failing, and it can prevent you from losing control of the company.
Some types of business life insurance also benefit your employees by providing them peace of mind that their loved ones will be well looked after should something happen to them. This can help you attract good staff members to your business.
You will have to fork out for the monthly premiums, and business life insurance policies are not all tax efficient, so weigh up the pros and cons with your personal circumstances in mind.
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