Shareholder protection insurance cost is the sum of separate premiums, one for each owner, and every one of them is priced on that owner: their age, health and smoking status, the cover needed to buy their share, how long the policy runs and whether critical illness is added. That is why a real figure for a company or partnership comes from a quote for each owner rather than from a price list.

Want to see what cover would cost for your company's or partnership's owners? Each of them can be quoted by an FCA-authorised broker. Put your details in the short form here; the broker rings at no charge and talks the options through.

Why does one owner pay more than another?

Because each policy is priced on the person it covers, two owners of the same business need not pay the same. Legal & General's share protection guide for financial advisers (W13813, February 2026) makes the point itself: the premiums may differ because the owners' ages and amounts of cover differ.

The things that move a life premium elsewhere move it here too:

  • Age and health. An older owner, or one with a medical history an insurer weighs up, usually pays more than a younger, healthier one for the same cover.
  • Smoking. Smokers usually pay more than non-smokers.
  • The sum insured. In the arrangement Royal London's adviser guidance (8 September 2025) calls individual purchase, each owner insures their own life for the value of their share. A bigger share, or a higher agreed valuation, means more cover and usually a higher premium.
  • The length of the policy. A longer term usually costs more than a shorter one.
  • Critical illness. L&G's guide says critical illness cover "can also be added when taking out cover at an extra cost". Aviva's adviser brochure (AL15009, July 2026) adds that its life and critical illness cover pays only on illnesses that meet its own policy definitions.

How the cover amount is set, and why it should track the agreed value of each share, is explained in what shareholder protection insurance is.

Does insuring your own life or the other owners' lives change the price?

It changes how many policies there are, and so the total. In the own-life set-up, each owner has one policy, written in trust for the others; our guide to life insurance trusts explains how that works. Where owners insure each other instead, Royal London warns that with more than two or three owners the number of plans multiplies, and gives a four-shareholder company needing twelve.

Royal London also recommends equalising the premiums on own-life plans in trust, to keep the arrangement commercial, so how unequal premiums are balanced out is worth agreeing in advance with an accountant. A company buying back a shareholder's shares is a different structure, covered in business protection insurance.

Should the company or the owners pay the premiums?

In the standard own-life arrangement, the owners pay. L&G's guide says "Each owner undertakes to pay premiums on their own life", and that "If possible, the business should adjust their pay or drawings to compensate for this." A company can pay instead, and the three insurers' adviser literature sets out the tax consequences of each choice:

Who paysWhat the insurer's adviser guide says
The shareholders themselvesAviva: shareholders usually pay for their own-life policies, so they "don’t benefit from tax relief". Royal London: the premiums come out of pay after tax and "would not attract tax relief"
The company, on a shareholder's own policyL&G (premium paid for a shareholding director): it "will be classed as remuneration and the shareholding director will become liable for income tax and National Insurance Contributions (if applicable) on it". Aviva (its Business Life Insurance Options): a deductible expense for the business that "may give rise to a benefit in kind tax charge". Royal London (plans written under a trust): usually regarded as a trading expense, but taxed as income on the shareholder
The company, under a company share buy-backRoyal London: no relief, but the shareholder is not taxed
A partnershipRoyal London: "Premiums paid for partnership cover will not receive tax relief."

So a company-paid premium can come back to the owner as taxable pay or a benefit in kind, and the three guides word the company's side differently. Each insurer says its tax statements rest on its own understanding of current law and practice, which can change, so this is the general picture, not tax advice; how it applies to a particular business is one for the owners and their accountant. Whether the company can claim the premium is answered in is shareholder protection insurance tax deductible.

Which term suits, and does the price change as the business does?

The term needs to fit how long the owners expect to stay in the business. L&G says the choice "will depend upon individual circumstances and affordability. For example, if it is not known when an owner will retire, a Whole of Life Protection Plan may be an appropriate policy." What cover for life costs is covered in our guide to whole of life premiums.

It is not a one-off decision. If an owner leaves, L&G's guide says the arrangement will normally cease for that owner and the policy reverts to them. It also says the agreement "should be reviewed at least every three years", with the amount of cover reviewed at the same time, and a change to the cover usually changes the premium. When the retirement date is still open, the broker who phones back after you send the form can price more than one term for each owner, so the owners can compare them.

Frequently asked questions

How much is shareholder protection insurance per month?

Each owner's monthly premium is set by their age, health, smoking status, sum insured and term, so it is worked out owner by owner. Under the own-life arrangement the business's total is the sum of those separate premiums.

Should each shareholder take shareholder protection on their own life?

L&G's guide is built around that arrangement, with each owner's policy in trust for the others from the outset, and Royal London lists it first. How it compares with owners insuring each other, or the company buying back shares, is covered in our shareholder protection guide; how it differs from cover for one employee is in key person and relevant life compared.

Do shareholder protection premiums count as gifts for inheritance tax?

Aviva's brochure says premiums for a policy in trust "would normally count as gifts for inheritance tax purposes", but that "HMRC may accept there is no gifting where there is a reciprocal commercial arrangement requiring all partners/shareholders to enter into a share protection agreement." L&G's guide likewise expects no inheritance tax on the premiums provided all owners participate.

When the owners want actual numbers, a couple of minutes on the form is enough for a broker to call and price life cover, or life with critical illness, for each of them at no cost. More cover for companies and partnerships is in our business cover guides.

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