Why have Relevant Life Cover?
Relevant life policies are a form of employer-funded life cover that provides a 'death-in-service' style benefit to eligible employees. These policies are taken out by the business on the life of an individual employee and are typically written into trust, ensuring that any payout is made directly to the employee’s nominated beneficiaries. Importantly, the benefit cannot be paid to the company.
At Wealthmax Financial Advisers Limited, we can help you set up relevant life cover tailored to your business needs. A payout is triggered if the insured employee dies or is diagnosed with a terminal illness during the term of the policy. Premiums paid by the employer are generally considered an allowable expense for Corporation Tax purposes. From the employee’s perspective, there is no income tax liability on the premiums, as they are not treated as a benefit in kind. Additionally, for most individuals, any payout from the policy will be free from income tax and inheritance tax, subject to current HMRC rules and the correct trust structure being in place.
What are Benefits of Relevant Life Cover?
So, why should you consider obtaining a relevant life insurance quote for your employees? Well, there’s a variety of advantages to be enjoyed by both employers and employees, which break down in the following way:
Improved employee attraction / retention
This type of borrowing offers a lump sum with a fixed or variable interest rates for a set term (e.g. 5 years).
Estate Planning
Here, you get flexible access to funds up to a predetermined limit, with interest charged on the amount borrowed.
Improved Personal Coverage
Relevant life cover offers great peace of mind to employees and their families without affecting their pension allowances.
Corporate Responsibility Perception
Providing cover like this for employees demonstrates that you’re a caring employer, with a focus on the welfare of those that mean a lot to your business.
FAQs
Looking for a Relevant Life Cover?
Wealthmax is here to help. Our advisers are experienced in Relevant Life Cover and can design a plan tailored to your needs. Contact us today to secure the right cover and provide valuable protection for you and your employees.