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.
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.
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