A common query that I get from clients is how much cover can they have through a relevant life policy. Most company directors take a small basic salary usually just below the basic rate tax threshold. The rest of their remuneration comes in the form of dividends and for some no director employees they may get bonuses or overtime. Many clients want to get as much cover as possible through these tax efficient policies but many assume that dividends cannot be taken into account.

However the providers will take into account all the remuneration as a total so basic plus dividends plus bonuses etc. Over the years the income multiples that can be used has increased from provider to provider. The range varies from 10 times multiples to 25 times multiples and depends from providers to provider by age range.