A relevant life insurance policy enables employers to provide individual death-in-service benefits for their UK-resident employees who are aged 17 - 71 when the policy is established. The policy, which is applied for and paid for by the employer, pays out a tax-free lump sum if the insured employee dies — or is diagnosed with a terminal illness — whilst in the service of the employer.
Relevant life plans are however available only where an employer-to-employee relationship exists — i.e. employees of a limited company. For that reason, relevant life insurance is not available to sole traders, a partnership’s equity partners or equity members of a Limited Liability Partnership
Employees can use a relevant life policy to provide their own individual ‘death in service’ benefits in addition to those offered by their employer’s group life insurance scheme if such a scheme exists. The premiums paid to a relevant life policy and the benefits paid out, are not included in the employee’s annual or lifetime pension allowances. (Relevant life is a term insurance, so the policy has no surrender value.)
Amount of cover
The policy’s sum assured is based on a multiple of the employee’s total remuneration, which includes his or her salary and any dividends and/or bonuses they may be paid. There is no statutory limit on the amount of cover. Depending on the age of the employee, and the insurance provider’s terms and conditions, the multiple could be as much as 10 to 25 times remuneration.
Tax benefits
Employer: Providing Her Majesty’s Revenue & Customs agrees that the premiums paid are wholly and exclusively for the purposes of the business, the employer is entitled to corporation tax relief on the payments. Furthermore, there are no National Insurance contributions to pay on the policy payments.
Employee: There are no National Insurance contributions to pay on the policy payments and as the payments are not treated as a benefit in kind, they are not subject to income tax. On the death of the insured person, the tax free lump sum will not form part of the deceased employee’s estate and will not be subject to inheritance tax.
TAX TREATMENT DEPENDS ON INDIVIDUAL CIRCUMSTANCES AND IS SUBJECT TO CHANGE.
Trust
To ensure the proceeds go directly to the employee's family or financial dependants, we will normally recommend that the policy is written in an appropriate trust.
Portability
If the policy is portable, the employee can take it with them should they move to a new employer, although a new trust would need to be set up in that circumstance. The employee can either assume responsibility for making the policy payments, or ask their new employer to pay the premiums as part of a benefits package.
What were the circumstances that caused you to initially look for an adviser?
For our mortgage application
How has Jenny Whittle helped you?
With the mortgage application and made the entire process so much easier and speedy.
Have you seen the outcome you were hoping for?
Yes we were able to purchase our property within a two month period
What could they have done better?
Nothing as Jenny was excellent and I have since referred her to others
Jenny's reply
Thanks Linda and for recommending me to your friends! I will be in touch soon to discuss your remortgage.
What were the circumstances that caused you to initially look for an adviser?
We've used Jenny before to help secure a mortgage, so when our fixed term was coming to an end, we were happy to use her services again.
How has Jenny Whittle helped you?
she helped us renew our mortgage.
Have you seen the outcome you were hoping for?
Yes, we're on the best fixed rate we could have achieved under the economic circumstances.
Jenny's reply
Thanks Kate for the review. I hope you have a fantastic special birthday celebration in July!
What were the circumstances that caused you to initially look for an adviser?
We initially contacted Jenny to find out about mortgage options for us.
How has Jenny Whittle helped you?
Jenny has gone above and beyond to support us in our first house purchase together. From navigating mortgage options that suit us and not pushing us into just any deal to thoroughly explaining all the different options when it comes to insurance and protection. She has also been incredibly helpful when our initial sale fell through. She kept us in the loop, every step of the way and responded to our queries and questions with lightening speed and has always been available when we needed her. She has given us exceptional service throughout.
Have you seen the outcome you were hoping for?
Yes.
What could they have done better?
Nothing. Honestly, everything has been perfect.
Jenny's reply
Thank you Victoria and Graham for the lovely review. Fingers crossed for a smooth house move!
What were the circumstances that caused you to initially look for an adviser?
We was after some help in finding the best mortgage interest rates and advice on what type of mortgage to go for.
How has Jenny Whittle helped you?
Jenny helped us by explaining different types of mortgages and their pro’s and con’s. She also managed to find us mortgages that accept price work which was helpful. Jenny managed to get us a rate we was happy with.
Have you seen the outcome you were hoping for?
Yes
Jenny's reply
Thank you James and Jasmine for the lovely review, it's been fantastic to work with you both. I hope the house move goes smoothly!
What were the circumstances that caused you to initially look for an adviser?
Remortgage
How has Jenny Whittle helped you?
Advised on available mortgages
Have you seen the outcome you were hoping for?
Yes
What could they have done better?
Nothing
