Relevant Life Insurance

Relevant life insurance allows business owners to provide their employees with death-in-service benefits outside a registered group life scheme. It’s designed to pay out a lump sum on death or diagnosis of a terminal illness. Straightforward and cost-effective, it can also be tax-efficient for the business and the employee.

The cover must be placed in trust to ensure any benefit may be paid to the person covered or their beneficiaries. We offer a dedicated Relevant Life Trust, available via our online journey or as a paper trust. We cannot advise on whether putting any particular plan into trust would be suitable in your client’s particular circumstances and would recommend that they take professional legal advice on the trusts suitability.

Why it's needed

With relevant life insurance, we keep it simple and we make it accessible too.

Even the smallest of businesses can offer this benefit; allowing them to attract top talent with a competitive benefits package.

But it’s not just for small businesses, a relevant life policy could still be the right choice for your client if they have a larger enterprise. In fact, relevant life cover can even be taken out in addition to existing insurance for the ultimate benefits package.

Where it's suitable

If your client’s business is too small to qualify for a group scheme, they can use relevant life insurance as a tax-efficient benefit for individual employees.

Premiums may be treated as an allowable expense for the business in calculating its tax liability – provided the local inspector of taxes is satisfied the payments qualify under the ‘wholly and exclusively’ rules.

Group schemes usually only cover up to 4 times an employee’s salary. With AIG’s Relevant Life Insurance, employers can cover up to 35 times salary (depending on age).

Benefits of Relevant Life Insurance

Premiums may be treated as an allowable expense for the business in calculating its tax liability – provided the local inspector of taxes is satisfied the payments qualify under the ‘wholly and exclusively’ rules.

Premiums are usually viewed as an allowable business expense, not a benefit-in-kind. This means employees don’t need to pay income tax or National Insurance on premiums - a potentially significant saving.

Any payout from the policy will not count towards an employee’s lifetime pension allowance.

Two doctors walking up stairs

Best Doctors®

We give your clients access to Best Doctors for invaluable second medical opinions. Their knowledge helps your clients and their immediate family get the right diagnosis, treatment and care.

Best Doctors is a non-contractual benefit which can be withdrawn at any time without notice.

Literature and support materials

Relevant Life Insurance - Key Facts

This document describes what is covered by Relevant Life Insurance, who can buy it and how it works

Download Updated 30 Apr 18
Relevant Life Insurance - Reasons why

This provides useful examples for a ‘reasons why’ letter and scenarios where relevant life insurance is suitable

Download Updated 01 Feb 16
Relevant Life Insurance - Cover Details

This explains how the cover works and the terms and conditions for Relevant Life Insurance

Download Updated 30 Apr 18
Relevant Life Insurance - Adviser Guide

This document explains what relevant life insurance is and who it may be suitable for.

Download Updated 29 Apr 19