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.