Relevant Life Insurance

A Relevant life policy is a tax efficient term assurance plan available for employees. Relevant Life is an alternative way for companies who want to provide a death in service benefit for an employee, without the need to set up and arrange a registered group scheme.

Similar to a death in service scheme, relevant life is paid for by the company and not from the employees taxable income.

The policy is owned by the employer and the policy is written into a ‘Relevant Life Trust’ benefit is nominated by the employee, meaning the proceeds upon death are paid usually free from inheritance tax.

Who is Relevant Life For?

• Employers with too few employees to set up a registered group scheme.
• Directors wishing to provide cover for themselves
• High earning individuals such as directors, where ‘ death in service’, does not form part of their ‘lifetime allowance’ (£1.5 million 2012/13)
• Employees and directors who have limits / risttrictions on their current group scheme eg 4 x salary maximum

Why Relevant Life?

• Huge savings can be made when replacing your personal life cover with relevant life
• Maximum benefit of 15 – 20 x annual salary
• Easily convertible to a standard term policy in the event of ceasing employment

Sample Savings Calculation  ( attached to email )

Based on a monthly premium of £100

Criteria for Relevant Life

There are no specific limits to the amount of benefit that can be provided, however most providers have set a limit of 15 – 20 x annual salary including dividends.

• Benefits are payable as a lump sum, no dependants pension can be provided
• Only life can be arranged
• Benefits must cease at age 75
• There are no surrender values
• Benefits must be made payable to an individual or charity through a Relevant Life trust.