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Relevant Life Insurance
Relevant Life Insurance offers special advantages to professionals, business owners and
contractors that run a limited company.
Relevant Life Insurance is a type of life insurance designed for employers to provide individual life cover for their employees as a death-in-service benefit. It is called "relevant" because it meets specific criteria set by HM Revenue & Customs in the UK, making it tax-efficient. The premiums paid by the employer are generally treated as a business expense, making them tax-deductible, which distinguishes it from traditional life insurance policies.
Secure Your Company's Future
The advantages of Relevant Life Insurance
Tax Efficiency
The premiums paid by the employer are typically treated as an allowable business expense, making them tax-deductible, which can lead to potential savings for the company.
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Individual Coverage
Relevant Life Insurance provides personalised life cover for individual employees rather than a group policy. This allows employers to tailor the coverage to the specific needs of key employees, ensuring adequate protection for their families.
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Attract and Retain Talent
Offering Relevant Life Insurance as an employee benefit can be an attractive perk for potential employees and help retain valuable talent. It demonstrates a commitment to the well-being of employees and their families, enhancing job satisfaction and loyalty.
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Financial Security for Loved Ones
The primary purpose of Relevant Life Insurance is to provide financial security for the families of key employees in the event of their death. It ensures that loved ones receive a lump sum payout, helping them cope with financial obligations and maintain their quality of life.
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5 reasons why Relevant Life Insurance might be for you
You see immediate savings
By paying for life insurance through your business, you can reduce your personal outgoings by hundreds if not thousands of pounds per year.
NI doesn’t apply
Relevant Life Insurance isn’t treated as a benefit-in-kind, is not included as a P11D benefit.
You can claim tax relief
Your business can claim Corporation Tax Relief on your monthly Relevant Life Insurance premiums.
There’s no impact on your existing benefits
Relevant Life Insurance isn’t treated as a benefit-in-kind, is not included as a P11D benefit.
It’s a flexible, tax-free payout
There is no tax to be paid on Relevant Life Insurance benefits and no restriction as to what the payout is used for.
Protect what you love.
When set up correctly, Relevant Life Insurance can support you and your loved ones in a number of ways:
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Mortgage protection
Overwhelmingly, clients come to us at PJN Billing Services looking to secure life insurance that simply covers the outstanding amount left on their mortgage. However, it’s vital to consider any other debts in addition to your mortgage when establishing the amount of cover to secure.
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Paying off outstanding debt
Many believe that their debts cease to exist when they do, but the reality is very different. Assuming their assets don’t exceed them, any debt is handed over to their next of kin. That’s why, in order to truly protect what you love, it’s important to consider debts beyond your mortgage.
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Income protection
Keeping your family protected after your death is about more than leaving them debt free. It’s also important to consider the loss of income they will suffer when you’re no longer around. What changes would that mean to your family’s lifestyle?
The cost of raising children
The cost of supporting a family and bringing up children is also
something many people overlook when considering life insurance.
DID YOU KNOW?
The basic cost of raising a child to age 18, excluding housing, childcare and council tax, is
£160, 692
for a couple.
&
£193, 801
for a single parent or guardian.
- Research conducted in 2021 by the Child Poverty Action Group
The Important Stuff
Your adviser will be able to walk you through the specifics of the policy you choose,
however, there are some details you should be aware of when choosing Relevant Life Insurance.
» You are only covered for the duration of the policy.
» The cover only lasts while you keep up your monthly payments.
» You have to be a salaried director or an employee of a limited company and resident in the UK.
» Traditional life insurance can be subject to inheritance tax. Relevant Life Insurance, when set up as a trust, means there will likely be no tax surprises in the lump sum you intend to leave your loved ones.
» There is no benefit in kind charge.
» The personal savings to you (by moving the cost of your personal life cover to your company expenses) could be significant and help to pay for the holiday, car or house extension.
» You should regularly review your cover, especially if your circumstances change.