Client Profile
Mrs. Burn, a senior lawyer at a large national firm, recently took the bold step of leaving her established position to launch her own company. While her entrepreneurial venture has been financially rewarding, Mrs. Burn recognised a key gap in her new setup: the lack of death-in-service cover, a benefit she previously enjoyed. With a husband and two young children to consider, she was keen to ensure that her family would have financial protection in the event of her passing.

Challenges

• Protection for Family: Without the death-in-service benefit, Mrs. Burn sought a life insurance solution to safeguard her family financially.
• Tax Efficiency: As the director of her own limited company, Mrs. Burn wanted a cost-effective way to secure this cover while maximising tax efficiency.

Solution: Relevant Life Plan
Mrs. Burn approached me, following a referral from her accountant, for expert advice on addressing her insurance needs. After a thorough assessment of her financial situation, objectives, and family needs, I recommended a Relevant Life Plan for Mrs. Burn, structured with the following benefits:

1. Trust-Based Life Insurance: The life insurance policy was established under an appropriate trust, naming her husband as the beneficiary. This setup ensured that her family would have direct access to funds if the worst were to happen, without the need for probate and with added inheritance tax efficiency.
2. Company-Funded Premiums: The premiums for the life insurance plan, which cost £80 per month, were paid directly by Mrs. Burn’s company. By funding the policy through her business rather than as a personal expense, Mrs. Burn realised significant tax savings, including:
• Employee National Insurance Contributions (NIC)
• Income Tax
• Employer National Insurance Contributions
• Corporation Tax

These savings not only made the policy highly tax efficient but also reduced her personal tax liability, a significant advantage for her growing business.

Outcome
Mrs. Burn achieved several key benefits from the Relevant Life Plan:

• Financial Security for Her Family: The trust-based insurance cover ensured that her husband and children would be financially secure should anything happen to her.
• Cost-Effective, Tax-Efficient Structure: By arranging the policy through her business, Mrs. Burn optimised her tax savings and reduced her overall financial burden, an essential advantage during the early years of her business.

Conclusion
By implementing a Relevant Life Plan, I provided Mrs. Burn with a robust solution to her life insurance needs while helping her maintain tax efficiency. This approach allowed her to enjoy peace of mind, knowing that her family is protected, and to focus on growing her business with confidence.