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.
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.
Where it's suitable and why it's needed
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.
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.
From on-demand consultations with UK based GPs to second medical opinions from Best Doctors®, our Smart Health service is a convenient way to connect your clients to tools that help them manage their health and wellbeing. It’s available 24/7, 365 days a year, anywhere in the world and can also be used by their partners and children up to age 21, all at no additional cost.
Smart Health is a non-contractual benefit that could be changed or withdrawn in the future.
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
Reasons why - Relevant Life Insurance
A handy guide to provide examples of what a ‘reasons why’ letter could look like 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