Business Protection Relevant Life Cover

Busy Bees Benefits offers Relevant Life Cover as a business benefit, and you can find out more information regarding this type of cover below. If you’re interested and would like to find out more about how Relevant Life Cover can help your business, get in touch with us by phone or email.

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WHAT IS RELEVANT LIFE COVER?

Relevant life cover is a life insurance policy that allows companies to offer a death-in-service benefit to its employees.

WHO CAN USE RELEVANT LIFE COVER?

There are many people who could benefit from relevant life cover. These include:

  • Businesses too small for a group life scheme
  • High-earning employees who might exceed their personal pension lifetime allowance. Registered group life schemes are included in pension legislation, meaning any paid claim is included in the employee’s pension fund. Claims paid under Relevant Life Cover don’t count towards a person’s lifetime allowance.
  • Members of group life schemes who want to top up their benefits (some group life schemes can be restrictive)

The person covered must be a UK resident and an employee of a UK business and cover must stop by age 75. As well as this, Relevant Life Cover is not available to sole traders or partnership companies and must be written in a discretionary trust.

WHY DO I NEED RELEVANT LIFE COVER?

This policy helps the families of an employee who has died or is terminally ill by giving them a lump sum to help with any finance issues that may occur. It is a great way to show employees that you appreciate them and will continue to support in the best way you can if something ever happens.

HOW DOES RELEVANT LIFE COVER WORK?

Relevant Life Cover is a tax efficient way for employers to give individual death-in-service benefits. It pays out a large sum if the employee dies or is diagnosed with a terminal illness during the term of the policy.

WHAT ARE THE TAX BENEFITS?

There can be tax benefits for both the employer and employee. In terms of the employer, there is corporation tax relief and no National Insurance Contributions to pay on the policy payments paid to fund the relevant life policy. In terms of the employee, there are also no National Insurance Contributions to pay on the policy payments paid to fund the relevant life policy, the payments are not subject to tax, the policy payments don’t count towards annual or lifetime pension allowances and so the money can generally provide their family with a tax-free lump sum if the worst happens to them.

WHEN IS THE BENEFIT RECEIVED?

Once the claim has been investigated, the lump sum would be sent to the family of the person insured.

CONTACT US

At Busy Bees Benefits, we work with our clients to find the right benefit schemes to help protect their business. If you’re interested in finding out how Relevant Life Cover can financially support your business, call us on 01543 484934 or email corporate@busybeesbenefits.com.

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Relevant Life Calculator

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Gross Pay Formula

Cost to Employee

Non-relevant Life Plan

Relevant Life Plan

Monthly Premium N/A Employee National Insurance (NI) N/A Employee Income Tax N/A

Cost to Employer

Monthly Premium N/A Employer National Insurance (NI) N/A Total Gross Cost Less Corporation Tax Relief

Total Monthly Cost

Relevant Life Monthly Saving

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These figures are for illustrative purposes only and the information is based on our present understanding of current law and HM Revenue & Customs practice for the tax year 2019/20. The calculation assumes that the same rate of Income Tax/National Insurance applies to the whole of the premium or sums used to fund the premium. It may be affected by future changes and individual circumstances.