In spite of several of its advantages, its very surprising to learn that the popularity of the relevant life policy is yet to reach its desired level. As per Legal & General's 2013 survey there are only 37 percent of the employers of the small business who are availing its benefits. If you are someone who is looking forward to setting up a death in service benefit of your employees you must check out whether you can qualify for a relevant life policy or not and secure it if you qualify. Therefore see for yourself whether you will be able to obtain the benefits or not.
The policy is particularly suited for the high earners, and directors, willing to arrange their own life insurance. They can be availed by employers of small businesses having lesser number of employees required to qualify for group life schemes. It is secured when the employer wants to set up a death in service benefit for his employees and is available to business owners trading through limited companies, limited liability partnership or partnerships. Sole traders can also obtain these policies.
The policy ceases to provide protection once the insured celebrates his 75th birthday. A trust is required to be set up (sometimes even before the policy is issued) in order to make the payouts to the family of the insured. Generally a critical illness or disability cover can't be added. Still if the insured wants he can check out if exceptions are made by certain companies are or not. Speaking more about the trust- the employer needs to sign the documents related to it and once it is set up generally all relevant dealings are done between the trust and the insurance carrier. The employer is definitely the initial trustee whereas the employee's spouse, other high officials of the company sponsoring the policy can be the additional trustees.
Why Relevant Life Cover be Chosen?
The relevant life policy is regarded as one of the most cost effective ways of offering a life assurance benefit for the employee as there are some substantial tax benefits allowed:
The employer receives Corporation Tax Relief as unlike the health insurance the premiums paid for the relevant life policy are not treated as benefit in kind. As a result, no income tax or national insurance is charged on the relevant life policy.
The benefits don't count towards the employee's allowance. This is not even included within the pension funds and as such high earning employees with substantial pension funds are particularly benefited.
Way to Choose a Cover
Since relevant life policy is a new type of cover in the market it remains necessary that you conduct due research in order to ensure that you are settling foir worthy deals. Consult multiple insurance carriers to know more about the features and judge their suitability. Take aid of the relevant life calculator to calculate the difference of costs of traditional life insurance and a relevant life cover.
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