Relevant Life Cover

A life insurance plan available to employers to provide an individual death in service benefit for their employees.

‘Put Life cover on expenses’

Relevant Life Plan offers a tax efficient way for an employer to arrange life cover, with a non-taxable benefit paid out to the employees’ family or financial dependents.

The cost of the plan is normally an allowable expense for the business meaning the business gets tax relief on the premiums paid.

With Corporation tax relief available, no additional income tax or National insurance to pay, it’s good for business for both you and your employees.

What is the relevant life plan?

It’s designed to provide life cover for an employee while working for you. This may include directors. Your business pays a regular premium based on the level of cover. If the employee covered dies or is diagnosed with a terminal illness (with a life expectancy of less than 12 months) whilst in employment during the term, the plan pay a fixed, one-off lump sum.

Relevant Life Plans can be particularly beneficial for small businesses that don’t have enough eligible employees to warrant a group life scheme. They can also be attractive for high-earning employees or directors who have substantial pension funds and don’t want their benefits to form part of their lifetime allowance, and for members of group life schemes who want to top up their benefits.

Who can take out a relevant life plan?

The person covered must be an employee of a UK business, which can include salaried company directors. Relevant Life Plans are not available for sole traders, equity partners of a partnership or members of a Limited Liability Partnership.

How it works

  1. Company takes out a relevant life plan
  2. The employee’s life is insured
  3. The relevant life plan is put into trust to a person/s of the employees choice
  4. If the employee dies during the term a claim is made by the trustee/s
  5. The plan pays out to the trustees/s

Amount of cover

The maximum amount of cover available usually depends on the employee’s age and their overall remuneration. With the maximum cover up to 25 x remuneration inc. salary, bonuses, and regular dividends. The amount of cover can remain the same throughout the duration of the plan or increase in line with RPI.

Frequently asked questions

  • What happens if you or an employee leaves the company

  • How do I set up a Trust?

  • What makes this plan so good?

Executive Income Protection

Want to know more about Executive Income Protection and how it can help you?

Learn more

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