Relevant Life Insurance

  • Relevant Life Insurance is a tax-efficient way for employers to provide life cover for an individual employee or company director. It's especially useful for businesses that don’t have a group life scheme in place but still want to offer valuable protection benefits.

    • Employers who want to provide death-in-service benefits to employees or directors.

    • Employees who want life insurance paid for by their employer, without the policy forming part of their lifetime pension allowance.

    • High-earning individuals or small business owners looking for a tax-efficient way to access personal life cover.

    It’s not available to sole traders, equity partners in partnerships, or non-salaried shareholders.

    • Covers one individual per policy.

    • Provides a lump sum payment on death or terminal illness (if life expectancy is less than 12 months) during the policy term.

    • No cash-in value or surrender value at any stage.

    • Cover amount is usually based on a multiple of total remuneration (salary, bonuses, dividends, etc.).

    • Accidental death benefit: Temporary cover while the application is being processed.

    • Continuation option: The employee may be able to take over the policy personally if they leave the business, without the need for further medical checks.

    • Life event increase: Some providers allow you to increase the cover after major life events such as marriage, birth of a child, or a promotion—without needing new underwriting.

    • A great way for small and medium-sized businesses to offer competitive staff benefits.

    • Helps attract and retain top talent by offering peace of mind and added financial security for employees’ families.

    • Demonstrates commitment to employee wellbeing in a cost-effective way.

    1. The employer takes out the policy for an individual employee or director.

    2. The policy is written into a discretionary trust from the outset, naming the employee’s beneficiaries.

    3. If the insured person dies or is diagnosed with a terminal illness during the term, a lump sum is paid to the trust for distribution.

  • Relevant Life Insurance offers employers a smart way to provide meaningful life cover to employees or directors in a highly tax-efficient manner. It’s especially beneficial for business owners and high-earning professionals who want personal cover without the drawbacks of personal taxation or pension limitations.

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