ConfidentialKey Person Protection Recommendation
Protection
Recommendation
for AJ Design Group Limited
Prepared by Mike Cooke · Broadbench · April 2026
Your Protection Recommendation
Dear Amanda,
Following our recent conversation, I have put together this recommendation for Key Person Critical Illness Cover for AJ Design Group Limited. As we discussed, setting up this cover through the business offers a genuine tax advantage — the premiums become a legitimate business expense, reducing your corporation tax liability.
I have prepared illustrative quotations at three cover levels — £50,000, £75,000, and £100,000 — for both yourself and James. Each scenario includes a full cost breakdown showing the gross premium, the corporation tax relief, and the net daily cost to the business.
Please take your time to review each section. Nothing is set in stone — the cover levels and structure can all be adjusted when we speak on Wednesday. I have included supporting documents from Vitality at the bottom of this page for your reference.
Why Key Person Cover Through the Business
Business Expense
Key Person Critical Illness premiums paid by AJ Design Group Limited are treated as an allowable business expense for corporation tax purposes. This means the company pays the premiums, and the cost reduces your taxable profit.
Corporation Tax Relief
At the small profits rate of 19%, every £100 spent on premiums effectively costs the business just £81 after tax relief. This makes comprehensive cover significantly more affordable than paying from personal income.
Why not Relevant Life Insurance? As we discussed, Relevant Life Insurance requires the insured person to receive a formal PAYE salary from the company. Since you currently take dividends rather than a salary, this route is not available at present. However, Key Person Critical Illness Cover does not have this restriction — it can be set up immediately as a business expense.
Why Vitality
After reviewing the market for business critical illness cover, Vitality's Serious Illness Cover 3x stands out as the most comprehensive product available. It is not a default choice — it is the result of independent research into the breadth of cover, claims record, and value for money.
Vitality — Serious Illness Cover 3x
- 164 conditions covered — three times more than most plans
- Multiple claims up to 300% of the sum assured
- 74 conditions paid in full; remaining 100 paid on severity
- Defaqto 5-Star rated — top marks for comprehensiveness
- Vitality Select rewards package included
- Dementia & FrailCare Cover as standard
Claims That Matter
1 in 8 Claims
In 2022, 1 in 8 Vitality serious illness claims would not have been covered by a typical critical illness plan. The 3x structure pays at earlier stages and for a broader range of conditions.
Multiple Claims
1 in 12 claims in 2022 were for members who had already claimed on their plan. With traditional insurers, the policy would have ended after the first claim.
Waiting List Benefit
24 conditions pay out as soon as you are added to an NHS waiting list — you do not need to wait for surgery or treatment to begin.
Illustrative Quotations
Below are three cover scenarios for both yourself and James. All quotes are for Vitality Business Serious Illness Cover 3x — level cover with guaranteed premiums to age 70. Each includes Total Permanent Disability cover and the Vitality Select rewards package.
Amanda Lee GillardDOB: 27 May 1983 · Non-smoker
Business SIC 3x
Recommended
Sum Assured
£50,000
Term
To Age 70
Monthly
£50.21
Guaranteed premiums. Includes TPD cover. Quote 35867060.
Business SIC 3x
Recommended
Sum Assured
£75,000
Term
To Age 70
Monthly
£86.19
Guaranteed premiums. Includes TPD cover. Quote 35867078.
Business SIC 3x
Recommended
Sum Assured
£100,000
Term
To Age 70
Monthly
£124.71
Guaranteed premiums. Includes TPD cover. Quote 35867092.
James LeeDOB: 31 March 1983 · Non-smoker
Business SIC 3x
Recommended
Sum Assured
£50,000
Term
To Age 70
Monthly
£46.39
Guaranteed premiums. Includes TPD cover. Quote 35867142.
Business SIC 3x
Recommended
Sum Assured
£75,000
Term
To Age 70
Monthly
£87.42
Guaranteed premiums. Includes TPD cover. Quote 35867156.
Business SIC 3x
Recommended
Sum Assured
£100,000
Term
To Age 70
Monthly
£112.82
Guaranteed premiums. Includes TPD cover. Quote 35867180.
Corporation Tax Relief Breakdown
The figures below show the combined cost for both Amanda and James at each cover level. All premiums are paid by AJ Design Group Limited as a business expense, attracting corporation tax relief at the small profits rate of 19%.
| Cover Level | Gross Monthly | Annual CT Relief | Net Annual | Net Daily Cost |
|---|---|---|---|---|
| £50,000 each | £96.60 | £220.25 | £938.95 | £3.73 |
| £75,000 each | £173.61 | £395.83 | £1,687.49 | £6.69 |
| £100,000 each | £237.53 | £541.57 | £2,308.79 | £9.16 |
* Combined figures for Amanda and James. CT relief calculated at 19% small profits rate. Daily net cost based on 252 working days per year. All premiums are guaranteed.
£50,000 Cover Each
£3.73
per working day
Less than a coffee
£75,000 Cover Each
£6.69
per working day
Less than a business lunch
£100,000 Cover Each
£9.16
per working day
Comprehensive protection
Individual Cost Analysis
The tables below break down the cost for each person at each cover level, showing exactly how the corporation tax relief reduces the effective cost to the business.
Tier 1: £50,000 Cover
| Person | Gross /mo | Annual Gross | CT Relief | Net Annual | Net /mo | Net /day |
|---|---|---|---|---|---|---|
| Amanda | £50.21 | £602.52 | £114.48 | £488.04 | £40.67 | £1.94 |
| James | £46.39 | £556.68 | £105.77 | £450.91 | £37.58 | £1.79 |
| Combined | £96.60 | £1,159.20 | £220.25 | £938.95 | £78.25 | £3.73 |
Tier 2: £75,000 Cover
| Person | Gross /mo | Annual Gross | CT Relief | Net Annual | Net /mo | Net /day |
|---|---|---|---|---|---|---|
| Amanda | £86.19 | £1,034.28 | £196.51 | £837.77 | £69.81 | £3.32 |
| James | £87.42 | £1,049.04 | £199.32 | £849.72 | £70.81 | £3.37 |
| Combined | £173.61 | £2,083.32 | £395.83 | £1,687.49 | £140.62 | £6.69 |
Tier 3: £100,000 Cover
| Person | Gross /mo | Annual Gross | CT Relief | Net Annual | Net /mo | Net /day |
|---|---|---|---|---|---|---|
| Amanda | £124.71 | £1,496.52 | £284.34 | £1,212.18 | £101.02 | £4.81 |
| James | £112.82 | £1,353.84 | £257.23 | £1,096.61 | £91.38 | £4.35 |
| Combined | £237.53 | £2,850.36 | £541.57 | £2,308.79 | £192.40 | £9.16 |
What Makes SIC 3x Different
Vitality's Serious Illness Cover 3x is fundamentally different from traditional critical illness plans. Rather than a single payout for a narrow list of conditions, it provides a tiered, severity-based structure that pays earlier, pays more often, and continues to protect you after a claim.
164 Conditions
Three times more than most critical illness plans. Includes 60 conditions unique to Vitality.
Severity-Based Payouts
74 conditions paid in full. The remaining 100 pay between 5% and 100% based on the impact on your life.
Up to 300% Payout
Claim up to three times your cover amount across multiple qualifying conditions over the life of the plan.
Dementia & FrailCare
Continues beyond your plan term. Unique to Vitality — no other insurer offers this as standard.
NHS Waiting List
24 conditions pay out as soon as you are placed on an NHS waiting list, not when treatment begins.
Children's Cover
Optional cover for children aged 1-22. Pays a lump sum if a child is diagnosed with a serious illness.
Downloads
The following documents are available for your reference. They include your individual quotations from Vitality and product brochures explaining the cover in detail.
Your Quotations
What Happens Next
Review this recommendation
Take your time to review the cover options and cost breakdowns. There is no pressure to decide immediately.
Our follow-up call — Wednesday 15 April, 10:00 AM
We will go through everything together, answer any questions, and agree on the cover level and structure that works best for you and the business.
Application
Once you are happy with the cover, I will guide you through the application process. Vitality's online application is straightforward and I will be with you every step of the way.