NRE - regarding insurances not pensions - back in the day

[wiseupm]

Hello everyone.

I am hoping that you guys could offer some information as maybe one of you may have been and maybe still in the similar position.

I was a contractor with a Ltd company back before year 2000 and before IR35. salary 7K dividend payments the remainder and I was adivised/sold insurance policies for life, Income Protection, and also a Health plan with Accident cover


Life Insurance
After a little research it appears that only 5% of your Net Relevant Earnings can be made as payments to a life insurance policy or is that only a pension policy with life insurance

Income Protection
Also had a policy stating that "Net Relevant Earnings" calculated as of - icta 1988 section 646


NET RELEVANT EARNINGS - From the ICTA 1988 section 646 it discusses "sole traders/partnerships" but not really LTD companies

SO..

NRE with regards to a LTD - Should the NRE earnings of a LTD company be seen as your own individual NRE? as isn't a Limited company treated as an entity in its own right?

NRE with regards to an individual - Dividend payments are excluded for pensions and generally most insurance policys is this correct?


The above questions dawned on me when an old credit card was taken out whilst in branch with the business manager which had PPI on it. The card PPI claim was DECLINED - and one of the reasons given was "not enough additional other cover to ensure card repayments"


Sorry but if my way of thinking is correct, it could highlight something of an issue to ye old contractors with policies still running.


Thanks in advance for any correction in way of thinkg

[northernladuk]

It appears so but really in this day and age if you are not constantly reviewing policies and other products that are out there to get the best deals and also one that covers your actual circumstances then you are a bit of a plant pot surely? You wouldn't continue to pay your mortgage or your phone bill for 12 years without checking so why would do the same to any other policy.... particularly when you may have picked the wrong product to start off with.

[wiseupm]

It appears so but really in this day and age if you are not constantly reviewing policies and other products that are out there to get the best deals and also one that covers your actual circumstances then you are a bit of a plant pot surely? You wouldn't continue to pay your mortgage or your phone bill for 12 years without checking so why would do the same to any other policy.... particularly when you may have picked the wrong product to start off with.

Totally agree with you regarding reviewing policies and being a plant pot for not. But back then... most IFAs didn't know anything about half the products they were advising hence some major exclusions missed. So if you were advised on a product when it was particularly irrelevant for IT contractors and LTD companies, you should claim it back just like PPI, especially if Life Insurance is involved - as it would of left dependants with squat.