Relevant Life Insurance
Provide the directors and your employees with a tax-efficient benefit
Rewarding your employees with additional benefits over and above their salary and bonuses helps boost morale and engenders loyalty. Meaningful benefits demonstrate you value your staff and help you retain staff in a competitive job market. Relevant life assurance is one such benefit that you can provide to your workforce.
Relevant life insurance
Relevant life cover allows you to offer your employees and directors a death-in-service benefit. It’s a tax-efficient life insurance policy which pays out a tax-free lump sum to your employee’s family or dependents on their death or diagnosis of a terminal illness. While life insurance can be an uncomfortable topic, your employees will appreciate knowing their loved ones will have some financial stability after their death. For you, the employer, it’s a cost-effective way of providing life insurance to your employees.
If you’d like to provide relevant life insurance as a company benefit, we can help you set it up. With access to the whole of the market, we can source the most competitive policies, many of which aren’t available to businesses directly. We’ll evaluate the options against your specific criteria and budget and recommend the policy best suited to your business. When you’re ready to go ahead, we’ll take care of your application. The process will be smooth and seamless, and your employees will appreciate your efforts.
Get in touch for an initial free, no-obligation chat with an adviser about securing key life insurance for your business.
Relevant Life Insurance FAQs
What is relevant life insurance?
Relevant life insurance is a policy an employer provides as a benefit to its employees, including directors. The policy pays out a lump sum to the employee’s beneficiaries if the employee dies while covered by the policy.
Who pays the premiums for relevant life insurance?
The employer pays the premiums and owns the relevant life cover. For this reason, the expense can be offset against corporation tax, making the policy tax-efficient for your company.
Is relevant life insurance tax-efficient?
Relevant life insurance offers several tax advantages, including:
- The insurance premiums are usually tax-deductible as a business expense.
- The insurance policy is not subject to National Insurance Contributions.
- There’s no benefit-in-kind tax for the employee.
- The benefit is usually free from inheritance tax.
- The benefit doesn’t form part of an employee’s annual or lifetime allowance for pension benefits.
What are the benefits of relevant life insurance over group life insurance?
Relevant life insurance provides individual policies tailored to each employee. This arrangement makes it more flexible and affordable for small businesses that might not qualify for a large group scheme.
Can relevant life insurance cover the directors of a company?
Yes, directors can be covered by relevant life insurance. For this reason, relevant life insurance is a popular choice for small businesses and limited companies where directors may also be employees.
What happens if the employee leaves the business?
If the employee leaves your company, the relevant life insurance policy can usually be transferred to their new employer or converted to a personal policy. Alternatively, the policy will be suspended.
