What is a Relevant Life Plan?

A Relevant Life Plan is a Term Assurance Policy set up in trust. It is available to employers to provide an individual benefit to employees, owners or directors. The company is the owner of the policy. In addition, the policy will normally pay out on diagnosis of a terminal illness and is expected to live less than one year.

The Policy must be placed into a Relevant Life Plan Trust at the outset.

There are many tax advantages, the premiums should be deductible for corporation tax, there should be no benefit in kind for the employee, and the benefit is usually paid free of Inheritance Tax (IHT). However we recommend that you consult with a tax professional prior to making a decision.

What are the advantages of a Relevant Life Plan for the business?

  • Provide a death benefit for just one owner, director or employee. An alternative for when a Group Death In Service scheme is not needed or there are not enough employees to form a group.
  • Premiums are normally regarded as an allowance business expense.*
  • Up to 25 times earnings available as a sum assured subject to underwriting and age.
  • Normally no employers NI to pay on the premiums as policy is not subject to a p11d.*
  • Easy policy setup with a low level of admin.

What are the advantages of a Relevant Life Plan for the employee?

  • Flexibility on sum assured, rather than just a multiple of salary that is present on a Group Death In Service scheme.
  • Underwriting can be carried out quickly. Insurers accept cover from an automated process more frequently.
  • Potentially no p11d liability falls on the employee.*
  • “Guaranteed Insurability” available as an option with some insurers. Thus allowing for future increases in cover with no further underwriting.
  • Benefit payment is made to a trust and therefore normally made free of IHT as falls outside of the insured’s estate.*

Why choose Alpha Healthcare?

*Whilst a Relevant Life Plan carries several advantages, as with all term assurance policies, it can alter your personal or corporate tax position. Please obtain your own tax advice from a professional prior to making any decisions and please remember that rules are subject to change at any time. Trusts may also attract periodic, entry and or exit charges.

¹Source: Assocation of British Insurers: https://www.abi.org.uk/news/news-articles/2018/04/protection-insurers-pay-out-record-breaking-5-billion-in-claims/

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