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
Businesses without a group scheme
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.
High-earning employees nearing maximum allowances
Relevant life insurance can be purchased in addition to a group scheme. As relevant life cover doesn’t count towards annual or lifetime pension allowances, it’s an added benefit that appeals to the highest earning employees.
Topping up life insurance benefits for group schemes
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
Tax-efficient for the business
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.
Tax-efficient for the employee
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.
Separate from the employee's lifetime pension allowance
Any payout from the policy will not count towards an employee’s lifetime pension allowance.
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.
From on-demand consultations with UK based GPs, to Best Doctors - the expert case management service with the world’s top medical specialists, our Smart Health service is a convenient way to connect your customers to tools that help them to manage their health and wellbeing from anywhere in the world, 24/7.
Smart Health and Best Doctors are non-contractual benefits 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
Relevant Life Insurance - Reasons why
This provides useful examples for a ‘reasons why’ letter and scenarios where relevant life insurance is suitable
Relevant Life Insurance - Cover Details
This explains how the cover works and the terms and conditions for Relevant Life Insurance
Relevant Life - Adviser guide
With our Relevant Life adviser guide, get to grips with the basics of the cover, learn more about how to set it up and the tax efficiencies and find out why AIG.