Relevant Life Cover

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Relevant Life Cover

A relevant life policy (or relevant life cover, as it is often referred to) is a tax-efficient life insurance policy available to limited company directors and their employees.

Fill out our short form or call us on 03333 440 129

What is a relevant life policy?

It’s a cost-effective alternative to a group life benefit (death-in-service), and in most cases, offers a lot more financial protection to an insured person and their family. Premiums are paid for by an employer on behalf of an employee or salaried director. Benefits are paid directly to the employee or their family. (Needs to be set-up in trust – enables a fast payment and keeps it out of the clients estate).

What are the Tax benefits of a relevant life policy?

Because a company pays the monthly premiums on a relevant life insurance policy, they are not treated as a benefit of kind, and are therefore tax-deductible. This means:

  1. Policies can be off-set against corporation tax as they are considered a business expense
  2. Premiums do not form part of a person’s lifetime allowance for pension savings

The Benefit of Relevant Life Cover for Directors:

Most UK business directors will have some form of life insurance policy in place. In most cases, however, these policies are being paid for by directors personally through their own pre-taxed income. If business directors are paying for their personal life insurance policy through their business, they will receive a P11D benefit-in-kind penalty.

In recent years, the only way for a limited company to pay for life insurance, was to take out a group life benefit (death in service) policy. Unfortunately for many, especially small business owners, these policies are tailored towards larger businesses, insuring upwards of 10 employees.

“A higher-rate taxpayer can save 49 per cent by paying for their personal life insurance via a relevant life plan. For a basic-rate tax payer the saving is around 36 percent” – unbiased.co.uk

The Benefit of Relevant Life Cover for Employees:

As a business owner or director, looking after your employees should be one of your top priorities. A relevant life cover policy can help you do just that – whilst offering a valuable tax benefit to your business.

Attracting and keeping top talent is a big challenge for all businesses, big and small. With pay rises across the UK being harder and harder to come by, more and more candidates are considering the additional benefits offered by employers when choosing a job. A relevant life cover insurance policy is one of the most important benefits a business can offer, especially to those with a family and mortgage to protect. Without it, you risk losing your best employees, or missing out on top talent altogether.

Summary of Benefits for Employees:

  1. Peace of Mind: Employees will receive a lump sum payment for terminal illness as well as death
  2. Cost Effective: No need to pay for level term or decreasing life insurance policies themselves
  3. Tax Efficient: No National Insurance contributions

Getting a relevant life policy quote

At One Direct Business, we work with several relevant life policy providers. The type of cover you need can vary depending upon the size and circumstances of your business. Other considerations that will impact the level of cover required include your occupation, general health and the lifestyle that you lead. To ensure you are taking the most suitable policy, we would advise taking the time to talk with one of our friendly experts.

To talk with one of our experts today, call 03333 440 129. Alternatively, please fill out the form above and one of our experts will contact you directly to discuss your requirements.

 

“”

As the director of a start-up marketing agency, I’m too busy to spend a lot of time researching all of the insurance policies we need, let alone finding time to search for the best cover. When I spoke with Gareth, he was incredibly helpful. He explained to me exactly what I need and then found the best policies for the business, its directors and employees. Now I know that the business and its assets are protected, whatever happens. I would highly recommend Gareth, Darren and the rest of his team.

Tom Mitchener “”