Relevant Life Cover
Relevant life cover is a death in service life insurance policy. It’s a policy taken out by the company on the life of the employee for the employee and their family. The company pays the premiums but the insurance pay-out goes to beneficiaries specified by the employee. This life insurance is the perfect option for high earning individuals as it doesn’t count towards your personal pension allowance and for small businesses it provides life insurance cover for an employee.
Who it’s For
Relevant life cover is a tax efficient form of life insurance. It’s perfect for company directors who want a life insurance as it will allow them to make savings on their tax. It’s also a good option for small businesses with less than five employees as most group policies are only for larger businesses however relevant life is done on an individual basis.
Benefits of Relevant life
There are many different benefits associated with relevant life. It is a policy to provide your family or loved ones with a lump sum should anything happen to you, leaving them financially protected. It is also tax efficient and doesn’t count as part of a personal pension allowance. Another benefit is that it means small businesses can provide life insurance benefits their staff improving both staff moral and staff retention.
How Much Could You Save
Relevant life is tax efficient because the business can set the cost of the policy against its profits, saving the 20% corporation tax. Also as it is paid for by the business income tax and national insurance are not payable on the premium, it also doesn't count as part of a pension and can be deducted as a trading expense. The policy also has to be written into trust which then allows it to side step inheritance tax.
Why You Need it
Relevant life is protection for your loved ones or those of your employee. Relevant life means that they will be provided for should the worst happen. It can allow them the finances to pay for a funeral or just to cover mortgage and general bills while they are grieving. The money is in trust so will be paid to them quickly and with no legal issues so you can be sure that they have adequate financial protection in place.
Improve Staff Moral
Providing an insurance policy for your staff is a great way to improve staff retention and moral. Your staff will feel they are appreciated and you will be providing a level of care. These help your business because employees will work harder for you and your staff turnover will decrease. It is also good for small businesses to have employee benefits packages because it can help them appear financially secure when they are recruiting.
As relevant life policies are so tax efficient there is a strict criteria which needs to be met. No businesses larger than five employees can have them and the policy will only pay out if the insured party dies before the age of seventy five. Critical illness cannot be added on to the policy and the policy must be written into trust.
Written in Trust
Relevant life must be written into trust. This means the insured person must specify beneficiaries to receive the insurance pay out, the beneficiaries can be loved ones, friends or even a charity of choice. By specifying beneficiaries the policy is able to avoid paying inheritance tax, the payment never becomes part of the insured’s finances instead it gets paid directly to the beneficiary.
Where to buy it
At Quotesupermarket.com we have specialised business protection advisers there to find you the best deal for your business. They can make sure you are eligible for relevant life and if not will find the right product for you. They will compare top UK brands to find you the lowest price saving you both time and money. Fill in our short online form to get great quotes today completely free and with no obligation.