Protecting your most important assets

Published on 17th December 2018

The relevancy of Relevant Life Cover

All businesses have Employee Liability Insurance, Buildings Insurance etc, – but how many cover their most important assets – their directors and key employees?

There is a suite of products from key person cover to, share/partnership purchase which are designed to meet the protection needs of a business. In this article we are looking at Relevant Life Cover.

Traditionally, Death in Service cover was the way that an employer made provision for their employees’ families in the event of their death however the “one size fits all” approach has its limitations and has led to the increasing popularity of Relevant Life Cover.

So, what is Relevant Life Cover?

  • A life assurance plan designed to pay out a cash lump sum to an employee’s family and dependants in the event of death.
  • A way of providing tailored death in service cover to the business owners/key employees.

What are the benefits?

  • Premiums are not treated as Benefits in Kind for the employee and are an eligible expense for Corporation Tax relief.
  • The policy is held in trust and pass to the beneficiaries (e.g. the employee’s family) without the need to wait for Probate or, more importantly, without forming part of the employee’s estate for Inheritance Tax purposes.
  • Unlike Death in Service cover, the benefits of a Relevant Life cover policy do not count towards the Lifetime Allowance.
  • It can be a way of transferring the cost of personal cover to the business.

If you would like to discuss Relevant Life cover, other business protection solutions, or indeed the wider aspects of financial planning please contact either Chris May,
(chris@aquilafm.co.uk) or James McSorley-Morgan (james@aquilafm.co.uk) who will be delighted to help. Alternatively, please call us on 01392 211233.