For both employers and employees, financial protection and peace of mind are paramount.
Relevant Life Assurance, often referred to as a Relevant Life Policy, is a tax-efficient life insurance solution designed to provide financial security for employees' families and beneficiaries.
It offers a range of benefits that make it a valuable tool for businesses and individuals alike. In this article, we'll explore the advantages of a Relevant Life Policy and how it can safeguard your financial future.
Tax Efficiency
One of the primary benefits of a Relevant Life Policy is its tax efficiency.
Premiums paid by the employer are typically treated as a tax-deductible business expense. This means that the company can benefit from Corporation Tax relief on the premiums, reducing its overall tax liability.
For employees, the policy is not considered a benefit in kind, so there are no Income Tax or National Insurance contributions on the premiums.
Financial Security for Families
A Relevant Life Policy provides a financial safety net for employees' families in the event of their untimely death. The policy pays out a tax-free lump sum to the designated beneficiaries, ensuring that loved ones are financially protected and can maintain their standard of living.
Flexible Coverage
Relevant Life Policies can be tailored to meet individual needs. Employers can choose the coverage amount, policy term, and beneficiaries based on the employee's circumstances.
This flexibility allows businesses to provide a valuable employee benefit that aligns with their specific requirements.
Attractive Employee Benefit
Offering a Relevant Life Policy as an employee benefit can be an attractive perk that helps attract and retain top talent. It demonstrates that the employer values its workforce and is committed to their financial well-being.
No Impact on Lifetime Allowance
Relevant Life Policies do not count towards an individual's Lifetime Allowance for pension savings. This means that employees can enjoy the benefits of life insurance without affecting their pension contributions or benefits.
No Inheritance Tax (IHT) Liability
The pay-out from a Relevant Life Policy is typically free from Inheritance Tax (IHT). This ensures that the beneficiaries receive the full sum without deductions, providing valuable estate planning benefits.
Peace of Mind
Above all, Relevant Life Policies offer peace of mind to both employers and employees. Knowing that financial protection is in place for loved ones in the event of an unforeseen tragedy provides reassurance and security.
A Relevant Life Policy is a tax-efficient and cost-effective life insurance solution that offers financial security and peace of mind for employees and their families. It demonstrates an employer's commitment to the well-being of its workforce while also providing valuable estate planning benefits.
For individuals, it offers a flexible and tailored approach to life insurance that aligns with their unique needs and financial goals.
The contents featured in this article are for your general information and use only and is not intended to address your particular requirements. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles.
All information It is based upon our current understanding of current legislation and HMRC guidance. While we believe this interpretation to be correct, it cannot be guaranteed that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Thresholds, percentage rates and tax legislation may change in Finance Acts and bases of, and reliefs from, taxation are subject to change and their value depends on an individual’s personal circumstances.
Life Assurance plans typically have no cash in value at any time and cover will cease at the end of term. If premiums stop, then cover will lapse. You should review the level of cover required on a regular basis to ensure that it keeps in line with your earnings, otherwise, cover may be less than you need. If any relevant information provided, when applying, is not disclosed accurately and honestly, this could result in any cover offered becoming invalid and / or may result in the non-payment of any future claims.