1. What is relevant life insurance?
Relevant Life insurance also known as a Relevant Life Plan is a type of life insurance policy. It is a way a business can provide life insurance to its employees and directors, without the need to form a standard group life plan.
If the relevant life policyholder dies or is diagnosed with a terminal disease with a life expectancy of fewer than 12 months, it provides a lump amount to the policyholder’s family.
Some Relevant Life Plans offer critical illness cover providing added protection in the event of a serious illness.
2. Who is relevant life insurance for?
Relevant life plans can be set up for employees of a business and directors of a business. The plan is typically best suited to small and medium-sized businesses.
3. What are the benefits of relevant life insurance?
1. Individual Coverage: A Relevant Life Plan is a personal policy taken out by the employer on behalf of an employee or director. Each policy is separate and tailored to their individual needs, providing a level of customization not typically found in group life insurance policies.
2. Tax Efficiency: One of the most significant benefits of a Relevant Life Plan is its tax efficiency.
Corporation Tax savings from Relevant Life
Employer-paid premiums are deemed as an allowable expense, which means they can be deducted from corporation tax. This often results in tax savings for the employer.
Below shows an example of taking life insurance out personally or through a business:
Income tax-free for a beneficiary
In most cases, the proceeds or benefits paid out from a Relevant Life Plan are not subject to income tax for the beneficiary of the plan.
The payout from a Relevant Life Plan is usually excluded from inheritance tax. This is a significant benefit for those with bigger estates who want to protect their beneficiaries from potentially high inheritance tax bills.
3. Competitive Rates: Relevant Life Plans often offer competitive premiums. They are generally competitive when compared to traditional personal life insurance policies, providing cost-effective coverage for employees
4. How much cover is available under a Relevant Life Plan?
The amount of protection you can have in a Relevant Life Plan is normally determined by your salary, age, and the insurance provider's specific terms and conditions. Providers typically cover between 15-30x remuneration. Remuneration includes salary, bonuses, benefits in kind and regular dividends from the employer.
5. How can we help?
If you want advice on relevant life insurance then click the link below to have a free consultation call.
This content provides is for educational purposes only and does not constitute personal advice. Should you need advice, please request it. Remember that investments can go up and down in value, you may get back less than you put in.