Relevant Life Insurance – The Employee Benefit Your Business Needs
Many businesses now choose to offer their employees some form of life insurance. However, it’s still a benefit that many businesses feel unable to offer their staff.
This is primarily the case for small business owners, who perhaps have too few employees to set up a group scheme. Or businesses who cannot afford the expense of setting up personal plans.
The good news is, these businesses and their staff no longer have to miss out.
After changes to group life legislation made in 2006, you no longer have to set up a registered group life scheme to offer death-in-service benefits to employees. Instead, you can set up a Relevant Life Plan.
What is Relevant Life Insurance?
Simply put, Relevant Life Insurance is a type of life insurance which pays out a tax-free lump sum in the event an employee dies.
So how does it work? A Relevant Life Policy is taken out on the life of an employee, owned and paid for by you, the company. If the employee then dies or is diagnosed with a terminal illness, the claim is paid to the employee’s beneficiaries – usually next of kin or children.
Benefits to You – The Company
Tax-efficient life insurance to protect both your company directors and employees – what isn’t to like?
Here are the key benefits a Relevant Life Insurance plan could offer you, the business owner:
Benefits to Your Employees
Relevant Life Insurance is undoubtedly a win-win for business owners. But first and foremost, this particular type of insurance has been designed with employees and their families in mind.
Want to reward and protect your staff, as well as attract only the best and brightest to your team?
Here are the biggest benefits of a Relevant Life Insurance plan for employees:
What Else Do I Need to Know?
Similar to a group life insurance scheme, you can choose to set your insurance limit as a multiple of a salary. This cover can always be increased in the future. But don’t worry, your adviser will be on hand to help you and the employee decide on an appropriate amount of cover.
So how do you qualify for the plan?
There are a few conditions that must be met in order to enjoy the tax benefits mentioned above.
The policy can only be taken out on a salaried employee of your business, who must also be a permanent resident of the UK. One life is covered per policy, with the company as the policy holder and the single employee as the person who is to be insured.
It is also important to remember that Relevant Life Insurance is intended for life cover only and should never be used with the sole intention of avoiding tax.
Want to find out more about how your business and employees can benefit from Relevant Life Insurance?
For more information, please speak to a friendly member of our team. You can call us today on 01702 619221 or contact us online.