Relevant Life Plan
What is a Relevant Life Plan?
A Relevant Life Plan is a term assurance plan available to employers to provide an individual death in service benefit for an employee. It's 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.
Who is it aimed at?
- 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’ (£1.073 million 2020/21).
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.
What makes it cost effective?
Relevant Life Plans are similar to most other types of life cover except they aim to offer a tax efficient way for an employer to arrange life cover benefits for an employee.
As such, Relevant Life Plans are usually viewed as an allowable business expense by HMRC so all premiums and paid benefits qualify for full Income Tax relief, National Insurance relief and Corporation Tax relief.
This means premiums could be reduced by up to 49% compared to a typical life policy if you are a higher rate tax payer. For a basic rate taxpayer this figure could be up to 40%.
Why choose our Relevant Life Plan?
A big saving can effectively be made on life cover, as our Relevant Life Plan can work out much cheaper than a typical life policy.