What actually decides what a business pays for protection cover
Business protection isn't one product, so it isn't priced as one either. Relevant life plans, key person cover, and shareholder protection are three distinct types of policy, each underwritten on its own terms, and I can't give you a figure for any of them without knowing your business and who you're covering.
What this page does instead is set out what actually moves the cost for each, and where a business genuinely has choices to make.
What actually drives your price
The factors an insurer actually looks at
Every insurer weighs the same broad set of factors. What you can’t change sets your starting point; what you can change is where you have real control over the outcome.
The age and health of the person covered
FixedWhichever type of policy you're arranging, it's underwritten around a specific individual — a director, owner, or key employee — so their age, health and medical history feed into the cost in the same way they would for a personal policy.
Their role and how critical they are to the business
FixedFor key person cover in particular, how central someone's contribution is shapes how much cover the business needs, though it's the business impact that's assessed rather than their salary alone.
Which type of policy you're arranging
Your choiceRelevant life plans, key person cover, and shareholder protection are underwritten differently from one another, because each is protecting against a different event — an individual's life cover, the business losing someone critical, or a co-owner needing to fund a buyout. Choosing the right one for the problem you're actually solving is a decision, not a formality.
Cover amount
Your choiceHow much cover the business needs is usually based on a business valuation, the financial impact of losing that person, or the cost of funding a share buyout — working that figure out properly, rather than guessing, is squarely your decision.
Term length
Your choiceHow long the cover runs — often tied to a loan term, a shareholder agreement, or simply how long someone expects to remain key to the business — is set by the business, not imposed by the insurer.
Want an actual figure?
I can't quote you here — but with a few details about your situation, I can usually get you real business protection figures from real insurers within a day.
Same person, different quotes
Why one insurer's terms for your business won't match another's
Business protection is underwritten on top of everything a personal policy already considers, plus the specifics of the business itself — its structure, its finances, and sometimes a formal valuation. Insurers don't align on how they weigh all of that any more than they do for personal cover, so the same director, the same business, and the same policy type can come back with genuinely different terms from different insurers. That's exactly why comparing more than one matters here, arguably more than anywhere else, given how much business-specific detail goes into the assessment.
I compare cover from leading UK insurers.
- Vitality
- Scottish Widows
- Zurich
- Legal & General
- Aviva
- Guardian
- MetLife
- The Exeter
- LV=
- Royal London
Price isn’t the whole story
Why the lowest quote isn't automatically the right cover
With business protection, getting the structure right matters as much as the terms of any individual policy — a key person policy written the wrong way round, or a shareholder protection arrangement without the matching legal agreement in place, can fail to do its job even if the premium looked competitive. The cheapest quote on a policy that's the wrong shape for your business isn't a saving, it's cover that may not actually pay out the way you assumed it would.
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Questions people ask
Straight answers, no jargon.
Can the company really pay for my life insurance, and does that make it cheaper overall?
In some circumstances, yes — relevant life plans exist specifically for this, and premiums are usually paid by the company rather than out of your own taxed income, which can make it a more efficient route for many directors. Tax treatment depends on your individual circumstances and may change in the future. Whether it suits you depends on your role and how the company is structured, so it's worth talking through your specific situation.
Is key person cover priced the same way as an ordinary life insurance policy?
The underwriting starts from the same place — the covered person's age and health — but the cover amount is usually driven by the financial impact of losing them to the business, such as lost profit or recruitment costs, rather than a personal need like a mortgage. That's a different calculation to work through than personal life cover.
Do I need a legal agreement alongside shareholder protection, and does that affect the cost?
Most shareholder protection arrangements sit alongside a legal agreement setting out what happens if an owner dies, so everyone knows in advance that the surviving owners will use the payout to buy that person's share. The agreement itself is a legal document rather than an insurance cost, but getting it right is part of making sure the cover actually does its job.
Are relevant life plans, key person cover, and shareholder protection interchangeable?
No — they're three separate products solving three different problems. A relevant life plan pays out to your family if you die; key person cover pays the business if someone critical to it dies or is seriously ill; shareholder protection funds the other owners buying a deceased owner's stake. Businesses often arrange more than one, but they're not substitutes for each other.
How is the cover amount for key person or shareholder protection actually worked out?
There's no fixed formula — it usually comes from a business valuation, the financial effect of losing that person, or the cost of funding a buyout at a fair price. I'll work through the numbers with you, and your accountant if it helps, rather than suggesting a generic multiple.
How do you get paid, and do you compare more than one insurer for business cover?
My advice costs you nothing. My commission is funded by the insurer if you decide to go ahead with a policy, and it doesn't change what you pay. I compare cover from leading UK insurers.
Tell me your situation.
Two minutes now. I'll come back to you within one working day with real figures from real insurers, based on you — not a guess.