What is it?

A relevant life policy in simple terms is a very tax efficient alternative to a death in service benefit. If your employee dies and the relevant life policy is in place, his or her family will be paid a cash lump sum. The employee does need to be employed by the company before the employee’s family can benefit. The relevant life policy could potentially also include terminal illness benefit, which will pay out to the employee should the life expectancy be less than 12 months.

The relevant life policy needs to be placed into trust which it is why it can be tax efficient for the employee and the employer. Quite a few providers these days offer a signature free trust, which speeds the process up. Call us now 0333 210 0082 for more information about trusts and when it is relevant to set one up

What is it going to do?

You could potentially save nearly 50% in tax compared to a run of the mill life policy. Based on current tax laws Sept 2019.

Two man holding mini blackboard with LIFE INSURANCE message

Why would I need it?

  • A relevant life policy would provide company directors beneficial tax incentives, because primarily the premiums are paid for by the company, not the individual.
  • A relevant life policy would be especially useful for an individual classed as a high earner, because the benefits of the relevant life policy wouldn’t count towards the current lifetime allowance of £1.25 million, if this was not the case the current taxable charge could be up to 55% upon death.
  • Relevant life policies are very useful for key employees of your business. They are able to provide levels of cover on an individual basis. So ideal if you only want to provide or reward a certain number of your employees, or in fact give variations of cover.
  • Businesses with too few employees to take on a death in service plan would find a relevant life policy useful, as they are able to set this up on as little as 1 employee.
  • Having a relevant life policy may also be useful for an employee who has hit their maximum pension lifetime allowance.

Where can I buy this?

There are lots of providers out there offering this type of insurance, choosing the right one could be a potential mid field. Why not let us at Independent Mortgages Brokers help and guide you through the buying process, our team of advisers have access to all the main providers offering you the relevant life product. Let us tailor a solution to fit your needs and circumstance. Make the right choices give us a call today to discuss your requirements.

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