Relevant Life Policy

What is a Relevant Life Policy?

A Relevant Life policy is an individual ‘death in service’ life policy. It is a term assurance plan which pays a lump sum benefit to the insureds loved ones, if they become terminally ill or die during the term of the plan.

Relevant Life Policies have unique tax benefits because the insurance policy is paid for by the business on the behalf of the employee. While the policy is personal to you and your employees’ the policy counts as an allowable business expense - it is also tax deductible and doesn’t count towards annual or lifetime pension allowances.

Relevant Life and Tax

Premiums for a Relevant Life Plan qualify for full Income Tax relief, National Insurance relief and Corporation Tax relief.

The sum assured (pay out) is also exempt from tax and isn't affected by inheritance tax because the policies are written into trust.

Relevant Life Policy Frequently Asked Questions

Who can take out a Relevant Life Policy?

The policies can be taken out by a UK Ltd company or a Limited Liability Partnership, on the life of one of their employees.

Who owns the policy?

The policy is owned by the company. However, any claim would be paid to a trust which is run through the trustees. In simple terms the insurance is owned by the business, but any benefit received goes directly to the employees chosen loved one.

Can I transfer Relevant Life Insurance to another company?

Yes, the policies can be transferred to a new company or turned into a personal policy, depending on the needs of the policy holder.

How much should I insure the person for?

Although a Relevant Life Policy is seen as business protection its really for the benefit of the life assured’s family. For that reason, it’s down to the individual to decide the level of policy necessary. We normally suggest people consider outstanding debts such as mortgages but also think about money that the remaining family will need for general living. Provider limits tend to be 15 or 20 times remuneration, dependent on age