Relevant Life Policy is used in order for a small to a medium business employer to give their individual employees a death in service benefit. It is more beneficial for those businesses who don’t have enough employees to create a group scheme. It is often used to insure the business owners in a highly tax-efficient manner.
These policies are owned by the business itself. The policy is written into trust and will payout to the employee in case of a critical illness or terminal illness. However, if the worst were to happen the beneficiaries of the employee would receive the payout. However, you have to ensure that all of the policies are up to date otherwise there would be no payout.
Those who have a group scheme in place can still arrange additional Relevant Life Policies. This is normally used for high earning employees due to their tax-efficient nature.
Relevant Life Policies are very tax efficient as it is seen as an allowable business expense. It could save a company Director more than 50% in tax.
Up until very recently, Relevant Life Policies would only pay out on death or diagnosis of being terminally ill. However, there are even more savings to be made for Company Directors due to the fact that some providers have started to include Critical Illness in their policies as well.
To find out more give us a call on 01332 821 340. Alternatively, fill in the enquiry form and we will get in touch with you.