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Relevant Life Cover

Protect your employees with relevant life cover - an added incentive and peace of mind for them, business-smart and tax-efficient for your business.

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Relevant Life Cover: protect your team members, the tax-efficient way.

Relevant Life Cover is a type of insurance policy that is paid for by a business or organisation to cover individual personnel. It is comparable to personal life insurance or a death in service policy. However, Relevant Life Cover is bought and paid for by a company and can be offered as an incentive for employees whilst also being a legitimate, tax deductible business expense.

The cover provided means that should an employee pass away during their tenure with an organisation, their family would benefit from a lump sum to help provide financial support during a very difficult time. The owning business does not directly benefit or profit from an insurance policy of this nature, however there are distinct company tax exemptions related to a unique policy such as this. This type of policy is also not included in pension allowances, either annual or lifetime.

The policy will be written under a discretionary trust with the beneficiary decided by the trustees. In practice this will usually be the person(s) nominated by the life assureds’ ‘expression of wish’, but cannot be guaranteed.

Frequently Asked Questions

What is Relevant Life Cover

Relevant Life Cover is a form of insurance that is provided by a business or organisation for their employees.

It is similar to a death in service benefit, in that should an employee pass away during the term of the policy then their family or loved ones would receive a tax free lump sum.

Does the individual own the Relevant Life Policy?

No, Relevant Life Cover is bought and owned by a business or company and they remain responsible for the premiums for the duration of the policy, or the employment period.

The company does not receive any money when a claim is made however as the policy is designed to ensure that the family and dependants of the employee are provided for should the worst happen.

Is it straight forward to purchase Relevant Life Cover?

The process of setting up this type of policy is much the same as with an individual life insurance policy.

There are legal documents that will be prepared and signed, along with the possibility of a medical report being required prior to the policy starting. It is possible that a policy could be active almost immediately, or it could take longer depending on the information required and how quickly this can be produced.

What is the level of cover provided for an employee?

There are a number of considerations to think through when setting up this type of policy.

Each individual to be covered would have differing circumstances, either financially and on a more personal note, to take into account.

Not only does the level of cover need to provide for family when the employee is gone but, there are also the financial implications for the organisation or business to consider as they will be required to cover the cost of premiums for the life of the policy.

How does a business benefit from providing Relevant Life Cover to employees?

Relevant Life Insurance is a legitimate, tax deductible business expense. Any premiums paid into this type of policy are completely exempt from tax, including Corporation Tax, Income Tax and National Insurance.

The policy does not form any part of an organisations’ estate or assets as it is legally written into trust for the duration of the cover.

Not only can Relevant Life Policies be considered as a legitimate business expense but it can also be a significant incentive to draw new and loyal employees.