Independent Life Insurance Broker in Berkshire

What is a Relevant Life Plan?

Relevant Life is a type of life cover that an employer can provide for its staff, including directors.  The business pays regular premiums based on the level of cover.  If the person covered dies whilst in employment during the term, the plan pays a fixed, one-off lump sum to the policy’s beneficiaries.  While it is the policy’s beneficiaries and not the business that receives the pay-out if the insured person dies, the premiums can be treated as an allowable business expense – with corporation tax relief, no additional income tax or NI to pay, it is cost and tax efficient for the business and the employee.

Who can take out a Relevant Life Plan?

To be eligible for a Relevant Life Plan (RLP), the person covered must be an employee of a UK business, which can include company directors who are salaried.  Unfortunately, RLPs are not available for sole traders, equity partners of a partnership or equity members of a Limited Liability Partnership.

How it works

• Company takes out Relevant Life Plan
• Employee’s life is insured
• The RLP is put in trust to a person of the employee’s choice
• If the employee dies during the term, a claim is made by the trustee/s
• The plan pays out to the trustee/s (inheritance tax planning)

 Key benefits over other group death-in-service schemes

• Tax efficiency – premiums are an allowable business expense that can be offset against corporation tax bills! The sum assured is also tax free.
• Separate from pension contributions – premiums and benefits don’t count towards the annual or lifetime pension allowances
• Individual cover – if a director or employee leaves a small business, they can keep the policy going by taking on the premiums, without the need for a new application, medical or underwriting
• More extensive cover – depending on your age, you can insure up to 25x your earnings

Helping you make good life decisions

I AM A CHARTERED, INDEPENDENT FINANCIAL ADVISER WITH 25 YEARS OF EXPERIENCE. I HAVE NO LINKS TO ANY NETWORK OR FINANCIAL INSTITUION. I WORK SOLEY IN MY CLIENTS’ BEST INTERESTS. I FIND THE MOST SUITABLE SOLUTIONS FOR MY CLIENTS FROM THE WHOLE OF THE MARKET AND I ENSURE MY RECOMMENDATIONS REMAIN SUITABLE ON AN ONGOING BASIS.