What Is A Relevant Life Policy And Should You Have One?

A relevant life policy is said to be a plan that provides the case of death in service insurance to an employee paid duly by the employer. It is specially designed to pay out the lump sum should the employee die or be diagnosed with severe illness or disease. Should a small business be looking for the high-level staff and offer them the policy as a part of a benefits package.

A Relevant Life Policy Sums Assured is best suited to the director who wishes to provide their staff members the benefit of the death in service without has to pick out a single scheme for all employees as well. This scheme is not suggested for the sole traders or where this is no bond of employee-employer relationship.

How much cover can you actually get?

The Relevant Life Policy Sums Assured is somehow similar to that of the death service package. This scheme is also based on a number of reimbursements.  Talking from the point of view of the company director the definition of payment is however based on the salary along with the dividends and bonuses. These are the factors can also vary from provider to provider and can somehow depend on the director’s age who is being insured.

Tax Benefits

The policy has tax benefits for both employer and employees and they are:-

Benefits to the Employer:

  • Corporation based tax relief and
  • No contributions to pay on other national insurance, if the payments are paid to the Relevant Life policy.

Relevant Life Policy Sums Assured

Benefits to the Employee:

  • The policy payments will not be taxed; and
  • The policy payments and other benefits will not count towards the yearly or lifetime pension scheme. 

Some Rules you should keep in mind

There are a number of rules to be eligible for, as an individual relevant life policy.

  • The life policy must provide you with a lump sum of benefit on death which is payable before the age of 75 years.
  • The plan should be paid out to death and there is no cover available for any sort of critical illness included.
  • The plan should not have surrender amount value.
  • Any benefit which is payable from the policy should only be only payable to the individual or even a charity.
  • The main goal of the relevant life policy should not be to save the tax.

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