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A Relevant Life Plan is a cost and tax efficient way of offering life cover to you and your employees, all for the benefit of your families. A Relevant Life Plan is a relatively new term life assurance for directors and employees which provides a death-in-service benefit to the employee’s family or financial dependants. Let’s take a look at what a Relevant Life Plan can bring to your business.

Keeping Your Team Covered

A Relevant Life Plan allows employers to offer financial security to an employee’s family in their time of need. This type of policy is a tax-efficient life insurance policy, set up by the employer and pays out a tax-free lump sum on the death or the diagnosis of a terminal illness of the person who is insured, the proceeds of which are then given to the employee’s family or financial dependants.

A Relevant Life Plan can be one of the best and most beneficial types of cover available if you are a small business that doesn’t have enough eligible employees to warrant a group life scheme. Similarly, a Relevant Life Plan can be attractive for high-earning employees or directors who have substantial pension funds and don’t want their benefits to form part of their lifetime allowance. Moreover, a Relevant Life Plan also allows members of group life schemes to top up their benefits so that they can also reap the rewards. A Relevant Life Plan also helps smaller businesses attract and retain high-calibre staff by offering an attractive benefits package as well as being a tax-efficient way for shareholder directors to take out life insurance.

Putting a Policy in Place

Similar to a regular life insurance policy, when setting up a Relevant Life Plan an individual is assessed based on a variety of factors such as how much cover is required, their health, age and lifestyle. The amount of cover a Relevant Life Plan will offer is usually determined by a multiple of annual salary depending on age. These factors then generate a premium that is paid by you the employer. The insured employee’s beneficiaries, typically family, will then get a tax-free pay out if the employee dies whilst working for the company. If you’re also looking for new ways to boost productivity and morale, a Relevant Life Plan is a very useful employee perk. Not only is the taxation very generous for both employees and employers, but this kind of policy also shows that you care for your team; the more that you put into your staff, the more you will get out of them.

There are strict rules to setting up Relevant Life Plans and therefore it is always advisable to seek proper independent advice.

Top Tax Benefits

One of the main benefits of a Relevant Life Plan is its tax and cost-effective nature. As an employer, taking out a Relevant Life Plan will provide you with corporation tax relief, as long as the premiums are wholly and exclusively for the purposes of the employee of the business. Similarly, there are usually no National Insurance contributions to pay on the policy payments that are paid to fund the Relevant Life Plan policy. It’s also key to note that the claim proceeds aren’t normally subject to any income tax, corporation tax or capital gains tax implications where the Relevant Life Plan is held in a trust.

Although a Relevant Life Plan holds a bundle of tax benefits for employers, it doesn’t mean that employees can’t also benefit from the plan outside of the actual cover. First and foremost, most insurance providers will provide your employee’s family with a tax-free lump sum if the worst was to happen, giving them peace of mind about the future of their household finances. Moreover, the policy payments and benefits of a Relevant Life Plan don’t count towards annual or lifetime pension allowances, which means you and your team don’t have to worry about enjoying your retirement.

Protectus by Your Side

When it comes to navigating the insurance market, knowing exactly what cover will tick all of your business’s boxes can be quite the task, but that’s where we can help. With over 20 years of industry experience, we can navigate the market to find your business the Relevant Life Plan that meets your requirements first time. With our one-to-one conversations and complete market reviews, we truly get to know your business’s needs to find suitable solutions for you.

The passing or serious illness of a key team member in your business can have serious financial, practical and emotional consequences. Alongside your Relevant Life Plan, we can help you find other channels of insurance that may complement your existing levels of cover. From Keyman Insurance for your most vital team members to Employment Assistant Programmes to support your team both in and out of the workplace, we can make sure you have everything you need to show your team how much they’re valued. Contact us to see how we can make your hunt for the perfect business policy simple and stress-free.