Relevant Life Insurance

Protect Your Team Tax Free with Relevant Life Insurance

Provide valuable benefits to your employees while enhancing your business’s financial security with relevant life insurance. This tax-efficient policy offers death-in-service benefits to individual employees, providing financial support to their loved ones in the event of their passing.

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Providing added peace of mind for your employees benefits both them and your business. Including a tax-efficient Relevant Life Plan (RLP) as part of a broader benefits package can help attract and retain top talent, essential for your business’s growth and success. By offering life cover that is highly tax-efficient, RLPs can significantly reduce costs compared to conventional life policies. This type of policy not only helps ensure your employees feel valued and protected but also contributes to a positive workplace environment, ultimately supporting your business’s long-term objectives and stability.

How Relevant Life Plans Work

A Relevant Life Plan is a straightforward term assurance product, particularly popular among owners of limited companies. We tailor the policy to meet your specific needs by understanding your circumstances. Set up and paid for by the employer, the RLP provides a tax-free lump sum to the employee’s beneficiaries if they pass away during the policy term, under current legislation. This arrangement is especially beneficial for small employers, high earners, and directors, enabling them to take advantage of ‘death in service’ benefits. If all qualifying conditions are met, and with proper tax planning, the savings can be substantial—over 40% for basic rate taxpayers and nearly 50% for higher rate taxpayers.

Maximizing Tax Efficiency with Relevant Life Plans

We work directly with your accountant to ensure you maximize the tax benefits of a Relevant Life Plan. Many company directors are unaware that they might be paying too much for personal life assurance through their personal finances. By opting for an RLP, you can secure comprehensive coverage in a tax-efficient manner, making substantial savings possible. While sole traders, equity partners of a partnership, or equity members of a Limited Liability Partnership cannot benefit from RLPs, we are prepared to discuss alternative solutions tailored to their needs. By collaborating with your accountant from the outset, we ensure that you benefit from all possible tax savings and have a clear understanding of how an RLP can be a valuable addition to your business’s benefits package.

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FAQs

Relevant life insurance is a tax-efficient life insurance policy designed for small businesses to provide death-in-service benefits to individual employees. It offers a tax-efficient way for businesses to offer life insurance coverage to employees without setting up a group scheme.

Relevant life insurance is suitable for small businesses, contractors, and freelancers who want to offer life insurance benefits to their employees or directors. It is particularly beneficial for businesses with a limited number of employees who may not qualify for group life insurance schemes.

Relevant life insurance offers tax advantages for both businesses and employees. Premiums paid by the business are typically tax-deductible as a business expense, while benefits paid out to employees are tax-free for their beneficiaries, providing valuable tax savings for all parties involved.

Relevant life insurance can cover employees who work remotely or overseas, if they meet the eligibility criteria specified by the insurance provider. However, coverage may be subject to certain limitations or exclusions based on the employee’s location and occupation.

No, relevant life insurance is tied to the employer, and coverage typically ceases when the employee leaves the company. However, employees may be able to convert their relevant life insurance policy into an individual life insurance policy or secure coverage through a new employer’s scheme.

Taxation is not regulated by the Financial Conduct Authority. Information is based upon our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from taxation, are subject to change.