- LIFE INSURANCE
- INCOME PROTECTION
- HEALTH INSURANCE
- BUSINESS PROTECTION
- SPECIALIST INSURANCE
The benefits of relevant life are available for three categories of customer:
Directors - Most commonly used to provide tax benefits on their life insurance as the premiums are paid by the company.
Key Employees - This is a great way to reward and maintain high performing staff members with varying levels of cover.
High Earning Individuals - The payouts on relevant life do not count towards the current lifetime allowance of £125 million where tax is currently charged at 55% on death.
Information regarding tax levels and basis of reliefs are dependent on current legislation. Individual circumstances are not guaranteed and may be subject to change.
A tax-efficient form of life insurance, allowing companies to provide a tax free lump sum benefit to employees on death (including salaried directors).
Premiums paid by the business
Often used by company directors to provide their own "death in service" benefit
Employer premiums usually treated as allowable expense by HMRC
Won't form part of employee's lifetime pension allowance
Lump sum free of Income Tax and usually Inheritance Tax
Can move with employee if needed
Terminal illness included
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Relevant Life insurance protects an employees family in the event they pass away.
The maximum amount of cover available will depend on the age of the employee at the time of application, but many providers will allow up to 25x their annual earnings.
Not normally, The most comprehensive Critical Illness plans are added to personal policies. It is however possible to get an alternative form of critical illness cover if the illness leads to retirement; get in touch to discuss this.
Directors and employees must be between the age of 16 and 70 and be UK residents.
If an employee leaves the company most providers will allow them to keep the plan by converting it into a private policy. They would then pay the premiums from their own bank account.
Yes, there are many reasons why a director may wish to transfer a policy from one business to another. If the initial company ceases to trade for example, most providers will allow at least one month to port the plan to a new business.
Most providers will allow Decreasing, Level and Index linked cover.
The term cannot exceed the 75th Birthday of an employee.
Benefits must be payable to an individual, charity or trust.
The plan must not be set up to avoid tax, and so cannot be used for business protection, for that you need a Key Man policy.
Critical illness or disability benefits are only allowed if they lead to the retirement of the employee.
Yes, monthly payments are only available on personal plans.
Yes, Index linking a plan is a simple way to have this occur automatically annually in line with the RPI.
Direct increases/adjustments to your plan will require additional medical evidence.
Relevant Life Plans are non-registered arrangements and are the successor to the old unapproved schemes.
Prior to the pensions simplification legislation, these schemes were taxed as income in the hands of the employee under ITEPA 2003 (Part 6 Ch 1).
This charge to income tax was removed by s.247 of the 2004 finance act and consequently there is no longer any income tax or national insurance implications on the employee.
Relevant life plans are owned by the discretionary trust that they are wrapped in for the benefit of the beneficiaries, and NOT the business proposing it.