Relevant Life Plan – Overview
A Relevant Life Plan is a term assurance plan available to employers to provide a lump sum benefit for an employee. It is designed to pay the lump sum if the employee dies whilst employed during the length of the policy. It will also pay out if the employee, whilst employed, is diagnosed with a terminal illness and meets our definition at any time during cover. A Relevant Life Plan is paid for by the employer.
Premiums are guaranteed unless indexation is chosen at outset.
Small businesses, looking to provide a lump sum benefit for its employees, placed in trust with employee’s family and dependants or a charity as beneficiaries.
To provide a tax efficient life insurance benefit for employers for its employees.
Suitable if customers
- Want to take advice on the suitability of the product
- Those looking to top-up benefits for senior employees where there is a group scheme in place.
- Employers wishing to provide a level amount of cover throughout the term of the policy.
- Small businesses looking to provide a lump sum in the event of death, terminal illness.
- Customers whose medical conditions do not prevent provisions of cover.
- Customers who are happy to be underwritten.
- Employers that can afford relevant monthly premiums for the life cover and are a UK business.
- Employers willing to place policy in trust.
- Where an employee has a significant pension fund already and is likely to exceed their pension lifetime allowance.
- Where an employer does not have a sufficient number of employees to be able to offer a group scheme.
Unsuitable if customers
- Wish to purchase direct without advice
- Individual life cover option at outset.
- Customers who want their policy to decrease.
- Customers who want a product to pay a monthly benefit if unable to work for a period of time.
- Customers with health conditions that may result in cover not being issued.
- Employers that already have a suitable death in service scheme or already have a group scheme where benefits are sufficient.
- Anyone requiring a non-underwritten journey.
- Employers that are not prepared to pay the monthly premiums.
- Small businesses who are not UK based.
- Employers unwilling to write policy under trust.
- Anyone looking to cover Critical Illness/TPD/Income Protection or seeking waiver of premium options.
- Any employer wanting key person cover or cover designed to protect a business loan or cover for share protection.
Amount of Cover
No minimum sum assured. Driven by minimum premium
The table below shows the maximum amount of cover available, based on the employee's remuneration. Remuneration includes salary, bonuses, benefits in kind and regular dividends from shares in the employer's company or a company within the employer's group of companies.
|17 - 29 years||up to 25 X remuneration|
|30 - 39 years||up to 25 X remuneration|
|40 - 49 years||up to 25 X remuneration|
|50 - 59 years||up to 20 X remuneration|
|60 - 73 years||up to 15 X remuneration|
The amount of cover remains the same throughout the duration of the policy.
- The minimum term allowed is 1 year (without Terminal Illness Cover).
- The maximum term allowed is 40 years.
- The minimum age to take out a policy is 17. The policy should be set up as Relevant Life Plan in the usual way, with the business as the policy owner and written under trust.
- The minimum age at the end of the policy is 29.
- The maximum age for buying a policy is 73.
- The policy must end by their 75th birthday.
- Payable monthly or annually by Direct Debit by the client's employer.
Benefits automatically included at no extra cost
- Accidental Death Benefit
- Changing your policy (Previously known as Guaranteed Insurability Option).
- Continuation Cover - if your client leaves their company they can convert their RLP to a personal protection policy or move it to a new employer without the need for further medical evidence or underwriting. We've now increased the time we need to be informed of an employee leaving the company from 30 days to 90 days.
- Terminal Illness Cover
- The policy is owned by the client's employer.
- The policy has to be placed into a Relevant Life Plan trust - Relevant Life Plan trust deed