A Relevant Life policy is an individual ‘death in service’ life policy. It is a term assurance plan which pays a lump sum benefit to the insureds loved ones, if they become terminally ill or die during the term of the plan.
The policy is similar to life insurance but can be a very useful tax efficient alternative, whilst also providing a valuable ‘death in service’ benefit for you and your employees.
Relevant Life Policies have unique tax benefits because the insurance policy is paid for by the business on the behalf of the employee. While the policy is personal to you and your employees’ the policy counts as an allowable business expense – it is also tax deductible and doesn’t count towards annual or lifetime pension allowances. Effectively the tax man helps you pay for yours and your employees life cover.
Although the policy is paid for by the business the sum assured goes directly to the loved ones of the bereaved, this is because the policy is written in trust. A trust is a legal document which states exactly where the money should in the event of your death, this prevents the sum from becoming part of your estate and is therefore not taxed.
Please note that Liberty Financial Services (UK) Limited does not offer advice on taxation matters. You should contact your accountant or other suitably qualified person to confirm whether this product is appropriate for your circumstances.
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