Relevant Life Cover is a ‘death in service benefit’. In simple terms it is a life insurance policy taken out by a company for an employee, which pay out directly to the employees’ beneficiary should they die whilst in employment.

The policies can be taken out by a UK Ltd company or a Limited Liability Partnership, on the life of one of their employees.

The policy is owned by the company. However any claim would be paid to a trust which is run through the trustees. In simple terms the insurance is owned by the business, but any benefit received goes directly to the employees chosen loved one.

Yes, the policies can be transferred to a new company or turned into a personal policy, depending on the needs of the policy holder.

Relevant Life Cover is normally very similar in cost to a normal term life insurance. Individual prices vary and are dependent on lifestyle and medical health, it’s also important to note that not all insurance providers offer Relevant Life cover, prices may not be as competitive. The tax advantages of a Relevant Life policy do mean you can make significant savings. If you would like a quote for Relevant Life cover, please use our online form.

Once a Relevant Life application has been submitted to the underwriter it can take anything from a few days to a few months to underwrite. It really depends on many factors including the health of the life assured. Normally a healthy person should expect to have a policy up and running within 2 to 3 weeks. Relevant Life cover needs a trust document to be filled in by the life assured which can means witness signatures. We normally find that this is the part which may hold up the policy underwriting, it’s important to note that underwriting such as GP reports and medicals are reliant on third parties which can slow the process down.

Yes

Yes Limited Liability Partnerships are treated in the same way as limited companies when it comes to Relevant Life Cover. The only exception is with Equity members of the LLP. For more information in regards to this please contact us using our online form.

Although a Relevant Life Policy is seen as business protection it’s really for the benefit of the life assured’s family. For that reason it’s really down to the individual to decide the level of policy necessary. We normally suggest people take into account outstanding debts such as mortgages but also think about money that the remaining family will need for general living. Provider limits tend to be 15 or 20 times remuneration, dependent on age

One of the main benefits of a Relevant Life Policy is the fact that it is seen as a company expense and is therefore tax deductible. The policy is also placed in a trust which is outside of the estate. This can help with inheritance tax issues as well. Information regards to taxation levels and basis of reliefs are dependent on current legislation. Individual circumstances are not guaranteed and may be subject to change. The Financial Conduct Authority does not regulate trusts.

A Relevant Life Cover is a life only insurance policy (you cannot add critical illness). The Relevant Life Plan should be set up so that the plan ends by the time the employee is 75.

Relevant Life Cover is paid to the trust and ultimately the family so the longer the term the better. As everyone knows the likelihood of death becomes higher as you get older. Polices are normally a guaranteed premium so it’s good to lock the premium in when you are young for as long as you can. The premiums will be more expensive short term. People are different so it’s really down to the individual on budget and what they are policies. As polices are paid by the company you may want to make sure you are using a provider which is happy to switch the policy to another owner if you leave that company or the company cease trading. In some circumstances you may be able to convert the policy into a normal term assurance paid by yourself.

No. The unique tax savings of this insurance prohibit the individual being insured from directly benefiting from the policy. The benefit can only be received by their loved ones, so critical illness cannot be added to the plan.

This depends on age, health and sum assured. Policies over £500,000 normally always require a medical no matter which provider the insurance is taken out with.

Provider limits tend to be 15 or 20 times remuneration, dependent on age

You have to be employed by a Limited company or Limited Liability Partnership which is based within the United Kingdom to take out Relevant Life cover.