Relevant Life Insurance is set up to allow employers to offer tax efficient life or critical illness to their employees. Both types of cover include terminal illness. The policy is owned by the company and paid for by the company. Relevant Life is set up with a trust where individual people, usually a partner, child or family member can be paid from any claim.
Feel free to try our relevant life calculator to work out how much you can save. MyKeyManInsurance has access to all the top providers of relevant life insurance and will be happy to talk you through how it works or give you a quick quote.
Relevant Life Plans are designed to enable small businesses to take advantage of the same tax breaks served by group life schemes in large corporations. Therefore any UK Ltd company or LLP can qualify and can now offer their employee's tax efficient life insurance. The life assured must be a UK resident and a PAYE employee. The life covered must remain an employee of the policy holder in order to be a valid relevant life policy. There are options to move the policy to a new company or to a personal life insurance if needed.
Assuming the policy is set up correctly HMRC will treat the premiums as an allowable expense which means they are not included as a P11D benefit. This means the premiums and benefits usually qualify for relief on:
Of course rules on taxation can change but for now, you are looking at massive advantages and huge savings against normal life insurance. You can read more details into relevant life HMRC tax treatment here.
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Yes LLP’s are treated the same as limited companies.
Although a relevant life policy is seen as business protection its really for the benefit of the life assured’s family through a trust. So its really down to the individual to decide the level of cover. We normally suggest people take into account outstanding debts such as mortgages but also think about money that the remaining family will need for general living. Relevant life insurance is can be taken out at up to 15x or 20x the persons salary.
One of the main benefits is the fact that it is seen as a company expense and is therefore tax deductible. The policy is also placed in a trust which is outside of the estate. This can help with inheritance tax issues as well. Information regards to taxation levels and basis of reliefs are dependent on current legislation. Individual circumstances are not guaranteed and may be subject to change. The Financial Conduct Authority do not regulate trusts.
As everyone knows the likelihood of death becomes higher as you get older. Relevant life plans are normally a guaranteed premium so its good to lock the premium in when you are young for as long as you can. Some providers will allow a term up to age 70.
(UPDATED 2016) Yes you can now add critical illness to a relevant life policy.
This depends on age, health and sum assured. Policies over £500,000 normally always require a medical no matter where we place it.
Depending on where you are in the country a nurse can come out to your work place or home. It may be necessary to visit the nearest surgery.
The limit is normally 20x salary. However normally anything under £1.000,000 is fine for anyone.
You have to be employed by a UK Ltd company or UK LLP to take out cover.
UK Limited companies or Limited Liability Partnerships (LLP’s) The life assured has to be a UK resident.
The policy is owned by the company. However any claim would be paid to a trust which is run through the trusties.
You can transfer a the policy to a new company or to a personal policy.
Relevant Life Insurance is normally very similar in cost to a normal term life insurance. However not all providers in the market offer relevant life so the market is somewhat smaller. However due to the tax advantages of a relevant life policy you can make huge savings. Use our relevant life calculator to see how much you could save. You can also use out enquiry form to get a quote for relevant life insurance.
Once an application has been submit to the underwriter is can take anything from a few days to a few months to underwrite. It really depends on many factors including the health of the life assured. Normally a healthy person should expect to have a policy up and running within 2/3 weeks. Relevant life cover needs a trust document to be filled in by the life assured which normally means witness signatures. We normally find that this is the part which may hold up the policy underwriting. Of course normal underwriting such as waiting for GP reports or medicals to take place are reliant on a third party so its sometimes down to the client. There are providers which allow us to fill in the trust documents online which means that a clean policy can be accepted and started straight away.