Relevant Life

For intermediaries only

Relevant life is a life insurance policy available to employers to provide an individual death-in-service benefit for an employee. It can help smaller businesses attract and retain high-calibre staff by offering them attractive benefits packages that are also tax efficient. It can also be a tax-efficient way for shareholder directors to take out life insurance (although it shouldn't be used for business succession planning).

The following information is based on our understanding of current legislation, taxation law and HM Revenue & Customs (HMRC) practice, which may change.

Tax benefits

There can be tax benefits for both the employer and employee.

Employer benefits:

  • Corporation tax relief (so long as the premiums are wholly and exclusively for the purposes of the business).
  • Normally no National Insurance contributions to pay on the policy payments paid to fund the relevant life policy.

Employee benefits:

  • Normally no National Insurance contributions to pay on the policy payments paid to fund the relevant life policy.
  • Can benefit from their employer making the policy payments and these aren't normally subject to tax as a benefit in kind or remuneration.
  • Policy payments and benefits don’t count towards annual or lifetime pension allowances.
  • Can generally provide their family with a tax-free lump sum if the worst happens to them.

Also, the claim proceeds aren’t normally subject to any income tax, corporation tax or capital gains tax implications, where the relevant life policy is held in a trust.

Why choose our Relevant Life policy?

  • We offer an immediate cover facility, subject to underwriting, providing up to £3.5 million cover.
  • We automatically include up to 60 days' accidental death benefit when our immediate cover facility isn't in use.
  • We offer a range of guaranteed insurability options, so your clients can increase their benefit amount without providing more medical evidence at certain lifestyle events.
  • We offer your clients the choice of whether to be a corporate trustee or not - as we understand it's not always administratively appropriate, depending on the structure of the company.
  • With people changing jobs more frequently than ever before, we've designed our Relevant Life policy to be portable when it's held in our Declaration of trust for a Relevant Life policy - giving the insured person various options when they move jobs.
  • Both your client and their employee (the insured person) have access to our range of support services, including our health and wellbeing service, second medical opinion service and key person replacement service.

You can find more details about our Relevant Life policy in our Relevant Life at a glance leaflet(Opens new window).

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