Relevant Life Insurance

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If something were to happen to you or one of your employees, would the families and beneficiaries be financially secure? Being able to offer peace of mind is a great thank you for their hard work and commitment. A relevant life policy is a way of providing death in service benefits on an individual basis and is particularly effective for small businesses.

What is relevant life insurance?

Relevant life insurance is a death-in-service policy that pays a lump sum to your beneficiaries if you were to die or to suffer a terminal or serious illness. If differs from other life insurance policies, such as Group Life, in that the premium is paid by the business instead of coming out of taxed income. In this way, it is a tax efficient benefit that is very flexible.

When discussing the options of whether Relevant Life insurance is viable with our clients, we start off with three key questions:

What provisions do you have in place to look after your family, or the families of your employees?

If you already have personal or private life cover in place, have you thought about paying for it through the business?

When was the last time you reviewed or optimised your executive benefits package?

How can Partners& support your relevant life insurance

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Challenge

If something were to happen to you or one of your employees, would the families and beneficiaries be financially secure? A relevant life policy is a way of providing death in service benefits on an individual basis and it has some helpful tax advantage.

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Support

It’s important to work with an adviser who will take the time to understand your business and the lifestyle of you and your employees in order to determine whether a relevant life insurance policy is the right choice for you and your business.

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Perform

A relevant life insurance policy is taken out by an employer in the name of the employed individual. It is designed to pay a lump sum to the individual or individual’s beneficiaries if the person dies or is diagnosed with a terminal illness, whilst employed.

Person pushing towards the finish line, challenge icon

Challenge

If something were to happen to you or one of your employees, would the families and beneficiaries be financially secure? A relevant life policy is a way of providing death in service benefits on an individual basis and it has some helpful tax advantage.

People support icon

Support

It’s important to work with an adviser who will take the time to understand your business and the lifestyle of you and your employees in order to determine whether a relevant life insurance policy is the right choice for you and your business.

Performance icon with 3 stars

Perform

A relevant life insurance policy is taken out by an employer in the name of the employed individual. It is designed to pay a lump sum to the individual or individual’s beneficiaries if the person dies or is diagnosed with a terminal illness, whilst employed.

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How can a relevant life insurance policy help your business?

In most cases it can be viewed as an allowable business expense by HMRC and as such, all premiums and paid benefits are eligible for full income tax, national insurance and corporation tax relief.

If you are a business owner, shareholder or self-employed and wish to provide the benefit of life insurance in a tax efficient way for yourself and / or a handful of employees, a relevant life policy could be the right choice for you.

Benefits of a relevant life insurance policy 

  • Provides a lump sum on the death (or diagnosis of a terminal illness) of the person insured
  • Can be classed as business expense, therefore the premiums benefit from corporation tax relief
  • Can be placed in trust for beneficiaries, therefore remains outside the estate for inheritance tax purposes
  • Offers significant cost savings for basic and higher rate taxpayers compared to ordinary personal ownership
  • Can be used to “top up” an existing Group Life scheme augmenting existing benefits

Who we support

Whatever the size of your business, you must be taxed under Schedule D PAYE salaried directors of a business.

it can be used in place of a Group Life policy.

it can be used to top up a Group Life policy and is an excellent tool to enhance an existing benefits package and retain your top talent.

It’s also portable, so that if you are a director of one business and you set up another business, you can take it with you.

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Questions to consider

  • Who does your business rely on for contribution to turnover, client introductions, operations management?
  • Would your business be affected if a key employee were taken ill or even worse?
  • What plans do you have in place if this were to happen?
  • In view of the difficult economic climate, would you be able to retain clients / keep employees motivated / repay loans?
  • How would you keep control of your business if something happened to one of your partners?
  • Is any debt adequately covered should the worst happen?
  • And what about the families… can they maintain their standard of living without support from the business?
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Our team have a track record of providing outstanding service and care when it comes to working with clients exploring whether to introduce relevant life insurance cover. They take the time to understand your business, your aims and objectives, all of which plays a part in providing you with an accurate relevant life quote.

 

Meet the team

Cate Mason

Client Executive – Business Protection

James Porter

Managing Partner - Wellbeing Health & Protection
Cate Mason

Cate Mason

Client Executive – Business Protection
James Porter Headshot

James Porter

Managing Partner - Wellbeing Health & Protection
James is a financial risk specialist with experience working with a wide range of clients during his time at Aon, Barclays Wealth Management and Mercer. He joined Partners& in 2020 to design and lead our wellbeing, health and protection proposition which has gone from strength to strength due to the combination of his people skills and his technical expertise.