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Relevant Life Insurance is a life insurance policy that is specifically designed to provide financial protection for individual employees in the event of their death.
For businesses that are looking to offer their employees financial protection but are not in a position to secure a group-wide policy, relevant life insurance can be an extremely beneficial and tax-efficient way to do so. The policy is written in such a way that it pays out a lump sum to the beneficiaries of the employee, which can be used to help with funeral costs, pay off debts or used as a financial safety net for dependents.
How does relevant life cover work?
If your employee dies or is diagnosed with a terminal illness while employed during the policy term, a relevant life policy will pay out a tax-free lump sum benefit to their beneficiaries. The lump sum can be used to help with funeral costs, pay off debts or other expenses, and can provide much-needed financial support at a time of grief and loss.
How much does relevant life cover cost?
The cost of relevant life cover will depend on a number of factors, including the age and health/life expectancy of the employee, the level of cover required and the length of the policy term. However, as relevant life insurance is a tax-deductible business expense, the premiums are often very tax-efficient. This means that businesses can save money on their tax bill while still providing their employees with financial protection.
Is Relevant Life Insurance tax-efficient?
Relevant life insurance is a highly tax-efficient way to provide death-in-service cover for employees, as it is an allowable business expense. This means that the premiums and benefits qualify for Corporation Tax relief, Income Tax relief, and National Insurance relief.
If you are a business owner or employer looking to provide your employees with financial protection in the event of their death, relevant life insurance can be an extremely beneficial way to do so.
What are the benefits of Relevant Life Insurance?
Relevant Life Insurance policies are an attractive proposition for both employers and employees.
- For employers, they offer a way to provide financial protection for their employees without having to go through the process of setting up a group life insurance policy.
- For employees, they provide peace of mind in knowing that their loved ones will be taken care of financially if they die unexpectedly.
Relevant life insurance policies also offer a number of other benefits, including:
- Tax efficiency: as the premiums and benefits are paid out of pre-tax income, relevant life insurance is a highly tax-efficient way to provide death-in-service cover for employees.
- Flexibility: relevant life insurance policies can be tailor-made to suit the individual needs of each employee, which means that they can be designed to provide the exact level of financial protection that is required.
- Peace of mind: knowing that you and your family will be taken care of financially in the event of your death can provide a great sense of peace of mind.
If you are an employer or employee looking for a life insurance policy that offers financial protection in the event of death, relevant life insurance could be the ideal solution.
Is relevant life cover right for your business?
Relevant life cover can be an extremely beneficial way to provide financial protection for your employees and position yourself as an employer of choice. However, it is important to consider whether it is the right solution for your business.
For smaller businesses, a relevant life policy can provide an alternative to a group life scheme, which can take more effort to set up and maintain.
If you are considering taking out a relevant life policy, we recommend speaking to a financial advisor to discuss your options and find the right policy for your needs.
Speak to an expert
Relevant life insurance is a type of life insurance that is specifically designed for business owners and their employees. It offers a number of benefits, including tax efficiency, flexibility and peace of mind.
At Echo Finance, our team of expert financial advisors can help you find the right life insurance policy for your needs. We will take the time to understand your individual circumstances and provide tailored advice to ensure that you find the most suitable cover for your requirements.
To speak to one of our advisors, please call us on 0800 093 4914 or request a callback by completing our online form.
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