A Relevant Life plan is a life insurance policy available to employers to provide an individual death in service benefit for their employees. It’s designed to pay a lump sum to the employee’s family if the employee dies when employed, while the plan is in place. Terminal Illness Cover is included, which could payout if the employee, whilst employed and covered by the plan, is diagnosed with a terminal illness, with a life expectancy of less than 12 months. Premiums are paid, and the policy is owned, by the employer.
It’s a tax-efficient way to offer life insurance through your business, with premiums typically treated as an allowable business expense and not taxed as a benefit in kind.
At Oviso, we help businesses set up Relevant Life policies that are written into a discretionary trust. This ensures any payout is made directly to the employee’s family or beneficiaries, usually free from inheritance tax.
Why choose a Relevant Life policy?
Tax savings – Premiums are generally tax-deductible for the business and do not count towards the employee’s annual or lifetime pension allowance.
Attract and retain talent – Offer high-value staff an additional benefit without affecting their take-home pay.
Flexible cover – Choose a level of cover that suits your needs, with the ability to adjust it as your business grows.
Peace of mind – In the event of the insured person's death (or terminal illness, if included), the payout can provide financial support to their family.
We’ll guide you through the process of setting up the policy and managing the trust arrangements, ensuring everything is done smoothly and correctly.
With so many options to consider, it can seem very confusing. So, to help you out we've answered some of your most common questions. For more specific advice about the options available for your circumstances, why not get in-touch with one of our friendly advisors.
The minimum age to take out a policy is 18. The policy should be set up as a Relevant Life plan in the usual way, with the business as the policy owner and written under trust. The maximum age for taking out a policy is 73 and the policy must end by the insured persons 75th birthday.
A Relevant Life plan is available as a standalone, single life plan. Premiums can be treated as an allowable expense for the employer in calculating their tax liability, as long as they qualify under the 'wholly and exclusively' rules.
You are able to transfer a Relevant Life plan from company to company without the requirement for further medical underwriting.
The amount of cover can remain the same throughout the duration of the plan or increase. The amount of cover on increasing plans rises in line with changes in the Retail Price Index, up to a maximum of 10% of the current amount of cover, helping protect the cover against inflation. The premiums on increasing plans increase by the change in RPI multiplied by 1.5, up to a maximum of 15% of the current premium.
To find out more about mortgages, personal insurance, business insurance and protection or to discuss the options available for your circumstances, contact our team of advisors
