If you have your own business or are a contractor then quite often you are the business and without you it will cease to function and there won’t be any profits coming in. That’s where a relevant life policy could be relevant to you.

So if you were to die what would the business be worth?

Would anyone want to buy your business?

In a lot of cases it the answer could be very little or nothing.

If your family are relying on that profit from your business what would happen to them?

What can we do about this?

The answer could be a Relevant Life Policy. A Life Insurance policy your company can take out on you, as the employee that would pay out a lump sum to your family, tax free and outside of your estate, should the worst happen. That way if you are your business and the business dies with you, you can make sure your family suffer less financially.

The other benefits of a Relevant Life policy are:

• It’s not a P11D Benefit in Kind
• The proceed are outside of your estate so shouldn’t be liable for taxes
• The company can claim corporation tax relief on the premiums
• Income multiples are generous (up to 35 x income, including dividends and P11D benefits in kind).
• No income multiple until over £1M with certain providers

So, it pays to talk to an expert to see which is most suitable for you.

And of course the magic question –

How much?

As an example, a 40 year old non smoker in good health could get a £250,000 policy to Age 67 for around £25 a month.

So how much are you worth to your business?