Relevant Life Insurance

Relevant Life Insurance is the equivalent of Group Life Insurance but for smaller companies, typically covering single directors. Premiums are paid by the company and are usually tax deductible although the benefit is paid to the employee’s estate. Therefore, relevant Life Insurance can be a highly tax efficient way of providing life cover.

Request Callback

Relevant Life Insurance is the equivalent of Group Life Insurance but for smaller companies, typically covering single directors, where the company pays the premiums but the benefit is paid to the employee’s estate. Premiums are usually tax deductible making Relevant Life Insurance highly tax efficient whilst the premiums are not considered a ‘benefit in kind’ for the employees by HMRC.

Tax Efficient Life Cover

Home » Business Insurance » Relevant Life Insurance

What Are The Benefits Of Relevant Life?

Relevant Life Insurance premiums are usually eligible for corporation tax relief.
Your employees will receive high-quality life insurance, even if they are smokers or have previous health problems.
Should the worst happen, your employee’s family will receive a cash lump sum, which is usually tax-free including inheritance tax (paid by a relevant life trust).
There is no tax to pay on the premiums – it is not classed as a ‘benefit in kind’ by HMRC.
As a benefit, your business will be highly attractive to new talent, and you are more likely to retain existing talent within your company.
As a business, this will help to build trust and loyalty, showing a ‘duty of care’ to your employees by valuing their welfare.

Choosing The Right Policy

At Halo Consulting, we will look at the following factors:

The number of employees you have
The type of industry you work in
And the level of benefit required

For more information, read our FAQs and watch our explainer video on Relevant Life Insurance below.

5* Client Service

At Halo Consulting we’re passionate about delivering great service. We use an independent service (reviews.io) to collect feedback from verified customers.

We’re extremely proud of our customer’s reviews and, if you decide to use our services then you too will be invited to leave feedback. We look forward to exceeding your expectations.

Read our 5* Reviews

Request a callback

To provide you and your company with the highest level of service, we need to understand your requirements.

Request a callback at a time to suit you. In most cases, this call should take no more than 30 minutes.

FAQS – Group Life Insurance

Below are some of our frequently asked questions regarding Group Life Insurance.

However, for the best help, assistance and advice please give our team a call on 0116 366 6866 or use the form to request a call back.

What does a Relevant Life policy cover?

Used by employers to provide a ‘death in service’ benefit for employees, a Relevant Life Plan (RLP) can help smaller businesses retain and attract staff. This policy offers attractive, tax-efficient benefits and is a useful way for a director or shareholder to take out tax-efficient life cover.

Why is a Relevant Life policy tax-efficient?

Usually, the policy would be exempt from corporation tax and National Insurance contributions for the employer. For the employee, National Insurance is not charged on the premiums; benefits do not count towards the annual or Lifetime Allowance (LTA) and the policy won’t be taxed as a “benefit in kind”.

What does the term Lifetime Allowance mean?

The Lifetime Allowance is a term indicating the maximum value of benefits that can be taken from a registered pension scheme whilst continuing to benefit from tax relief. The current limit is £1m; any benefit above this amount and taken as a lump sum would be liable for tax at 55%.

Who is allowed to have a Relevant Life policy?

You can be covered as an employer, and you can cover your employees.

How tax-efficient is Relevant Life cover?

With no National Insurance contributions applicable on premiums, this type of policy also qualifies for corporation tax relief.

What are the restrictions of a Relevant Life policy?

Firstly, the term of cover must finish before the insured person is 75. The benefit must not go back into the business; payment must go to an individual or a charity. If the plan is solely Life Insurance, then you cannot include Critical Illness to the policy.

What type of Life policy is it?

It is known as ‘term-based Life Insurance’.

Could I increase the level of cover?

In some cases, you can change or increase cover – please speak to one of our advisers for more information.

What amount of cover can be provided?

Different insurance providers have different limits, although usually cover amounts are limited. Please speak to one of our advisers for more information.

Could a Relevant Life policy be placed into trust?

In order to qualify for favourable tax treatment, Relevant Life policies are always written in trust.

What’s the difference between a Relevant Life policy and a Personal Insurance plan?

By having a Relevant Life plan, you can save money as you would not pay National Insurance on premiums and it usually benefits from Corporation Tax relief.

What are the main benefits of having Relevant Life insurance?

As the policy premiums are paid for by the business, they are not usually assessed as a benefit in kind for the employee. Plus, they are not subject to National Insurance contributions or income tax.

Do I have to provide cover for all my employees?

No, you can choose who you want to insure within the business.

Why should I choose this type of insurance?

Relevant Life is a tax-efficient way of providing Life Insurance for your employees. It is suitable when your business is not eligible for a Group Life scheme. Plus, if you have a substantial pension pot, Relevant Life are classed as excepted policies and so the benefits do not count towards the lifetime allowance.

How do I know if I am eligible for a Relevant Life policy?

If you are a Limited company, Partnership, LLP, charity, or a Sole Trader (with employees) then you would be eligible. However, if you are an equity partner in a partnership, a member of an LLP, or a Sole Trader (in your personal capacity as the business owner), then this policy would not be suitable.

How long would a Relevant Life policy last?

The policy must finish when the insured person reaches the age of 75. However, you can take this cover on a fixed-term basis for a number of years.

Does Relevant Life cover include Critical Illness?

We advise taking out a separate plan for Critical Illness as, generally, it is not included in a Relevant Life plan. The insurer Aviva has recently begun to offer this as part of their Relevant Life cover – however, this has yet to be tested in court.

Is there anything else included within Relevant Life cover?

Indexation and Waiver of Premium benefits can be included in this type of policy.

Is there a scenario when the policy would not pay out?

We always ask our clients to be honest and open when completing the application because, usually, non-disclosure of information tends to be the main reason why an insurer would not pay out.

Can you explain how Relevant Life cover differs from Key Man Insurance?

If anything happens to an insured person under Key Man cover, the company would be paid the sum. With Relevant Life, payment would be paid to the insured person’s next of kin (or a chosen charity).