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Relevant Life cover
What is Relevant Life cover?
A Relevant Life Plan 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.
Relevant Life Plans are not available where there is no employer/employee relationship. For example, sole traders, equity partners of a partnership or equity members of a Limited Liability Partnership.
Who is it aimed at?
Usually Relevant Life Cover is aimed at people like:
- 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).
What are the advantages of Relevant Life Cover?
- The policy premiums paid for by the business are not normally assessable on the employee as a benefit in kind so they are not subject to income tax.
- The policy premiums paid for by the business are not normally assessable for employer or employee National Insurance contributions.
- The policy premiums may also be treated as an allowable expense for the employer in calculating their tax liability provided that the local inspector of taxes is satisfied they qualify under the ‘wholly and exclusively’ rules.
What are the rules that qualify a person for Relevant Life Cover?
- The policy must only provide a lump sum benefit on death payable before the age of 75.
- The plan must solely pay out on death and have no serious or critical illness cover included.
- The plan must not have a surrender value.
- Any benefit payable from the policy must only be payable to an individual or a charity.
- The main purpose of the relevant life policy should not be for the avoidance of tax.
How can we help?
We here at Niche are insurance experts, and can help you with any queries that you may have. When you contact us about Relevant Life Cover we will take your details and the details of the person you are covering, will then look for all the cover that you will need and hunt for the lowest available quote. After we have secured you the best deal we will help you fill out the paperwork and get your plan in order.