Relevant Life Plans
Relevant Life Plans – Strange name but a handy product
Let your company pay your life insurance
A relevant life policy is a tax-efficient death-in-service product for individuals within a company.
It is a term assurance plan available to employers to provide an individual death in service benefit for an employee. It is designed to pay a lump sum if the person covered dies or is diagnosed with a terminal illness whilst employed during the term. A Relevant Life Plan is paid for by the employer.
Who is it aimed at?
- Employers looking to provide 'death in service' benefits, but with too few employees to set up a group scheme.
- Directors wishing to provide their own individual ‘death in service’ benefits without taking out a scheme on all employees.
- High earning individuals, such as directors, where ‘death in service’ does not form part of their ‘lifetime allowance’ (£1.5 million 2012/13).
Relevant Life Plans are not available where this is no employer/employee relationship. For example, sole traders, equity partners of a partnership or equity members of a Limited Liability Partnership.
So why a handy product?
Relevant Life Plans are similar to most other types of life cover except they aim to provide a tax efficient benefit provided by an employer for an employee.
Relevant life policies are not treated as a benefit in kind and they’re an allowable expense for the employer. Providers can settle their own level of cover, up to 20 time’s annual salary
A Relevant Life Plan is designed to be written in a discretionary trust at outset, with the employee’s family and dependants as beneficiaries.
Contact Tyas & Company on 01293 843900 for help and advice on this tax saving benefit