Benefits Of A Life Of Another Policy

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What is Life of Another Policy?

A Life of Another Policy in Ireland is a type of life insurance policy where the policyholder insures the life of another person - usually where there’s a financial or business interest. This type of policy is commonly used in business and family financial planning.

Here are some of the main benefits;

1. Business Protection

• Key Person Insurance: A company can insure the life of a key employee or director. If that person dies, the policy payout helps cover loss of income, recruitment, or replacement costs.

• Co-Director/Partner Insurance: Helps business partners buy out the deceased partner’s share from their estate, ensuring business continuity.

• Loan Protection: If a business has a loan guaranteed by a director, the business can insure that director’s life so the loan is repaid if they die.

2. Family Wealth & Estate Planning

• Cover for a Spouse or Relative: A person can take out a policy on a spouse or family member, especially if they are financially dependent on them or would be financially impacted by their death.

• This can also be structured to manage inheritance tax liabilities - especially relevant where assets are being passed to children or between spouses.

3. Tax Advantages (Business Use)

In some cases, particularly with key person insurance, premiums may be tax-deductible for the company - provided:

• The company is the beneficiary.

• The policy is not for personal gain (e.g., not part of a remuneration package).

• The purpose is to protect the business (not the insured’s family).

• Revenue Guidance (Ireland) applies strict rules, so it’s best to consult a tax adviser.

4. Control Over Proceeds

The policy owner controls who receives the benefit, which can help with:

• Funding buy-sell agreements in business.

• Ensuring liquidity for personal or business financial obligations upon the insured’s death.

  
  

5. Peace of Mind

• Helps reduce uncertainty by ensuring there’s a financial safety net if a key individual dies unexpectedly.

Important Considerations:

• Insurable Interest: The policyholder must have a clear financial interest in the life of the person being insured.

• Consent: The person being insured must give their written consent.

• Underwriting: The person insured undergoes medical and financial underwriting.

Contact us today and book your consultation and see how Quigley Financial Brokers can

help you choose the best options available.