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0116 366 6866
Introducers
What is Relevant Life Insurance? By Halo Consulting
Relevant Life Insurance – tax relief for your business Relevant Life Insurance o ers the same bene ts as Group Life Insurance – instead of your employees paying their premiums, your company would make these payments. This is a smart way to o er life insurance, as premiums are usually tax deductible and highly tax e cient for your people too, because they are considered as a ‘bene t in kind’ by the tax man. A smart and coste ective way to show your employees you care, why not choose Relevant Life Insurance for your company? What are the bene ts? Relevant Life Insurance premiums are usually eligible for corporation tax relief.
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Your employees will receive high quality life insurance, even if they are smokers or have previous health problems. Should the worst happen, your employee’s family will receive a cash lump sum, which is usually tax-free including inheritance tax (paid by a relevant life trust). There is no tax to pay on the premiums – it is classed as a ‘bene t in kind’ by HMRC. As a bene t, your business will be highly attractive to new talent, and you are more likely to retain existing talent within your company. As a business, this will help to build trust and loyalty, showing a ‘duty of care’ to your employees by valuing their welfare. At Halo Consulting, we will look at the following factors: The number of employees you have The type of industry you work in And the level of bene t required For more information on Relevant Life Insurance, please call us on 0116 366 6866 or email: info@halo-consult.co.uk
What does a Relevant Life policy cover? Used by employers to provide a ‘death in service’ bene t for employees, a Relevant Life Plan (RLP) can help smaller businesses retain and attract sta . This policy o ers attractive, tax-e cient bene ts and is a useful way for a director or shareholder to take out tax-e cient life cover.
Why is a Relevant Life policy tax-e cient?
Usually, the policy would be exempt from corporation tax and National Insurance contributions for the employer. For the employee, National Insurance is not charged on the premiums;
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bene ts do not count towards the annual or Lifetime Allowance (LTA) and the policy won’t be taxed as a “bene t in kind”.
What does the term Lifetime Allowance mean?
The Lifetime Allowance is a term indicating the maximum value of bene ts that can be taken from a registered pension scheme whilst continuing to bene t from tax relief. The current limit is £1m; any bene t above this amount and taken as a lump sum would be liable for tax at 55%.
Who is allowed to have a Relevant Life policy?
You can be covered as an employer, and you can cover your employees.
How tax-e cient is Relevant Life cover?
With no National Insurance contributions applicable on premiums, this type of policy also quali es for corporation tax relief.
What are the restrictions of a Relevant Life policy?
Firstly, the term of cover must nish before the insured person is 75. The bene t must not go back into the business; payment must go to an individual or a charity. If the plan is solely Life Insurance, then you cannot include Critical Illness to the policy.
What type of Life policy is it?
It is known as ‘term-based Life Insurance’.
Could I increase the level of cover?
In some cases, you can change or increase cover – please speak to one of our advisers for more information. https://halo-consult.co.uk/business-insurance/relevant-life-insurance/
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What amount of cover can be provided?
Di erent insurance providers have di erent limits, although usually cover amounts are limited. Please speak to one of our advisers for more information.
Could a Relevant Life policy be placed into trust? In order to qualify for favourable tax treatment, Relevant Life policies are always written in trust.
What’s the di erence between a Relevant Life policy and a Personal Insurance plan?
By having a Relevant Life plan, you can save money as you would not pay National Insurance on premiums and it usually bene ts from Corporation Tax relief.
What are the main bene ts of having Relevant Life insurance? As the policy premiums are paid for by the business, they are not usually assessed as a bene t in kind for the employee. Plus, they are not subject to National Insurance contributions or income tax.
Do I have to provide cover for all my employees?
No, you can choose who you want to insure within the business.
Why should I choose this type of insurance? Relevant Life is a tax-e cient way of providing Life Insurance for your employees. It is suitable when your business is not eligible for a Group Life scheme. Plus, if you have a substantial pension pot, Relevant Life are classed as excepted policies and so the bene ts do not count towards the lifetime allowance.
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How do I know if I am eligible for a Relevant Life policy?
If you are a Limited company, Partnership, LLP, charity, or a Sole Trader (with employees) then you would be eligible. However, if you are an equity partner in a partnership, a member of an LLP, or a Sole Trader (in your personal capacity as the business owner), then this policy would not be suitable.
How long would a Relevant Life policy last? The policy must nish when the insured person reaches the age of 75. However, you can take this cover on a xed-term basis for a number of years.
Does Relevant Life cover include Critical Illness?
We advise taking out a separate plan for Critical Illness as, generally, it is not included in a Relevant Life plan. The insurer Aviva has recently begun to o er this as part of their Relevant Life cover – however, this has yet to be tested in court.
Is there anything else included within Relevant Life cover? Indexation and Waiver of Premium bene ts can be included in this type of policy.
Is there a scenario when the policy would not pay out?
We always ask our clients to be honest and open when completing the application because, usually, non-disclosure of information tends to be the main reason why an insurer would not pay out.
Can you explain how Relevant Life cover di ers from Key Man Insurance? If anything happens to an insured person under Key Man cover, the company would be paid the sum. With Relevant Life, payment would https://halo-consult.co.uk/business-insurance/relevant-life-insurance/
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be paid to the insured person’s next of kin (or a chosen charity).
Disclaimer This information does not constitute nancial or any other form of professional advice. Should you require advice, please contact us directly on 0116 366 6866. It is important to ensure any insurance policy you take out is suitable for your needs.
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5.00 Average 28 Reviews
Skye Da Silva
Tracey Kitchen has always provided an outstanding service! She is highly professional and has always kept me updated in regards to my plan. Tracey is always there for any questions I may have and has always managed to get back to me in a timely manner. There is a personal element to her service which for me goes a long way.. I couldn't recommend her enough! Thank you Tracey. Posted 1 week ago
Fayzeh
I spoke to Tracey, she was very attentive to my needs and explained all the options very clearly. She always came back promptly whether via telephone call or email. Great cusromer service! Posted 1 week ago
Vik
Tracey was very efficient and knowledgeable. Posted 1 week ago
Lynne
A wonderful company to deal with. Tracey is so helpful and knowledgeable. Nothing is too much trouble and you feel that if you have any queries, issues, etc. she will go out of her way to try solve them. Halo Consulting deal with my Medical Aid, which is important in making me feel secure and confident in the knowledge that they are
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