In insurance policies for business owners and directors, a relevant life plan trust, group life scheme, or insurance is a tailored insurance policy designed specifically for business owners and directors. It provides a tax-efficient way to offer life insurance as an employee benefit, typically for key individuals within the company. Unlike traditional group life schemes, relevant life insurance allows for individual policies, offering flexibility and personalized coverage.
At Executive Life, they understand the unique challenges faced by business owners. That’s why we specialize in the relevant life insurance policies, offering expert guidance to protect your assets and ensure the financial security of your business.
Understanding Relevant Life Cover
Relevant life cover is the amount of money paid out in the event of the covered individual’s death or diagnosis of a terminal illness during the policy term of the person covered by the relevant life plan. The lump sum benefit provides financial support to the employee’s family or designated beneficiaries, helping to alleviate financial burdens during a difficult time.
Executive Life works closely with you to determine how much cover is the appropriate level of relevant life cover based on your specific circumstances and needs. We take into account factors such as your income, liabilities, and future financial obligations to ensure comprehensive protection.
Benefits of a Relevant Life Policy
A relevant life policy offers numerous tax benefits, advantages, and service benefits for both employers and employees:
- Tax Efficiency: Contributions toward the policy are usually treated as an acceptable business expense, providing potential savings on corporation tax. Additionally, the lump sum benefit payable to the employee’s beneficiaries is typically free from inheritance tax.
- Flexible Coverage: Unlike traditional group schemes, relevant life insurance allows for tailored coverage based on the employee’s salary, age, and other relevant factors.
- Employee Retention and Satisfaction: Offering relevant life insurance as part of your benefits package can enhance employee retention and satisfaction. It demonstrates a commitment to the well-being of your team members and their families.
How Does Relevant Life Insurance Work?
When you choose Executive Life for your relevant life insurance cover needs, we guide you through a straightforward process:
- Initial Consultation: Get in touch with us to discuss your business and the key individuals you wish to cover. We’ll gather the necessary information to understand your requirements.
- Tailored Recommendations: The team searches the market for the most suitable insurance providers, presenting you with a shortlist of options. We explain the pros and cons of each policy to help you make an informed decision.
- Application and Implementation: Once you’ve selected a policy, we assist you with completing the necessary paperwork. The digital process ensures a seamless experience without the hassle of printing or signing documents.
- Ongoing Support: With your policy in force, we provide you with a comprehensive pack of documents for easy reference. We also conduct annual reviews to ensure your coverage aligns with any changes in your business or personal circumstances.
How to Choose a Relevant Life Plan?
When selecting a life plan, it’s crucial to consider the benefits and assurances offered such as:
- Expertise: The team consists of experienced business operators who understand the unique challenges faced by business owners.
- Full Market Access: We have connections with every UK insurer, ensuring you have access to the best value premiums and coverage options.
- Regulated Service: Executive Life is an FCA-regulated life insurance broker, providing you with peace of mind and trust in the services.
Exploring the Advantages of Relevant Life Plans for Business Owners
Tax Efficiency and Corporation Income Tax Relief
One of the key benefits of a relevant life plan and policy is its tax efficiency for both employers and employees. Contributions made towards the policy are typically treated as an acceptable business expense, meaning income tax can be deducted from the company’s profits before tax. It can result in significant savings on corporation tax for the business.
Additionally, the lump sum benefit payable to the employee’s beneficiaries is usually free from inheritance tax. It provides peace of mind to employees, knowing that their loved ones will receive the full benefit without the burden of tax liabilities.
Flexibility and Personalization Compared to Group Life Scheme
Unlike traditional group life schemes, group scheme-relevant life cover offers flexibility and personalization in coverage. The policy can be tailored to the individual employee’s needs, taking into account factors such as salary, age-relevant life plans, and specific circumstances.
Business owners can choose the level of cover that best suits their key employees, ensuring that are adequately protected in the event of death or terminal illness. The personalized approach allows for a more comprehensive and targeted insurance solution.
Attracting and Retaining Key Talent
Offering relevant life insurance coverage as part of an employee benefits package can be a powerful tool for attracting and retaining key talent. In today’s competitive job market, top employees are often looking for more than just a salary. Benefits such as relevant life cover demonstrate a commitment to the well-being and security of employees and their families.
Employees who feel valued and supported by their employer are more likely to remain loyal to the company. It can lead to increased morale, productivity, and overall job satisfaction within the organization.
Providing Financial Security for Loved Ones
For employees, relevant life insurance provides invaluable financial security for their loved ones. In the unfortunate event of their death or diagnosis of a terminal illness, the lump sum benefit that provides life insurance can help cover living expenses, mortgage payments, education costs, and other financial obligations.
Knowing that their family will be taken care of financially can provide employees with peace of mind, allowing them to focus on their work and personal well-being.
Professional Guidance and Support
Navigating the complexities of insurance policies and tax implications can be daunting for business owners. That’s where Executive Life comes in to provide life cover too. The team of experts specializes in relevant life insurance, providing professional guidance and support every step of the way.
From initial consultations to policy implementation and annual reviews, we are here to ensure that you have the right coverage for your business needs. The goal is to make the process seamless and straightforward, allowing you to focus on what matters most—running your business.
Conclusion
In conclusion, relevant life cover offers a range of benefits for business owners and employees alike. From employee income tax efficiency and corporation tax relief to personalized coverage and financial security, it is a valuable asset for any company looking to protect its key individuals.
At Executive Life, they are dedicated to helping you navigate the complexities of relevant life insurance and find the best solution for your business.
FAQs
What is a Relevant Life Insurance?
Relevant life cover is a specialized life insurance policy designed for business owners and company directors. It provides individual life cover for key employees within a limited company only, offering tax-efficient benefits for both employers and employees.
Who Owns a Relevant Life Policy?
The employer owns the relevant life policy, but it is set up for the benefit of the employee’s age, and their designated beneficiaries. It allows the employee to receive the benefits of the death in service benefit under the policy while the premiums are typically treated as an allowable business expense.
Who are the Relevant Life Beneficiaries?
The beneficiaries of a relevant life policy are chosen by the employee and can include family members, dependents, or other designated individuals. In the event of death in service benefits or of the employee in the life of another basis’s death or terminal illness diagnosis, the lump sum benefit is paid out to the designated beneficiaries.
Is Relevant Life Insurance a Taxable Benefit?
Relevant life insurance is generally considered a tax-efficient benefit. Contributions made to service life expectancy benefits by the employer are typically treated as an allowable business expense, potentially reducing the company’s corporation tax liability. Additionally, the lump sum benefit paid out to beneficiaries is usually free from inheritance tax, providing valuable financial protection without added tax burdens.
