Relevant life insurance
Every day we speak to business owners from across the UK who are completely unaware of the favourable tax treatment which applies to Relevant Life Insurance.
The folks at HMRC are happy for Relevant Life Insurance to be treated as an allowable business expense, and as such, you could save up to 49% on your premiums. Now, if someone offered me a half price insurance plan that could benefit me and my family, I would snap it up and I’m sure you’re no different.
We know from recent research conducted by the Federation of Small Business that around 98% of businesses in the UK have fewer than 10 employees. It is unlikely that many of these small businesses will have death in service perks in place for their workforce as companywide schemes are not usually offered on such a small scale by UK insurers.
This is not to say that the above mentioned small businesses are unable to insure their teams.
With over 24 million people being employed by SMEs there are some serious savings to be made through the smart utilisation of Relevant Life insurance.
Not strictly a “business protection” product as such, Relevant Life often falls under the family protection umbrella. A lump sum benefit is left to the employee’s family if the worst happens and the employee dies or is diagnosed with a terminal illness whilst in employment. More often than not each employee will be designated a lump sum, or sum assured, based on a multiple of their income.
A business might decide to protect one of more of the following:
- All their employees based on a multiple of salary
- Specific Directors who wish to buy life insurance while utilising tax benefits
- High earners who don’t want to affect their Pension Lifetime allowance
Beyond the peace of mind that a Relevant Life plan will provide to an employed member of staff, it will also actively increase employee engagement and help with retaining and recruiting staff. Not all employers will provide their team with a death in service type policy and such a simple, cost effective benefit can go a long way to showing that you care about your work force and their financial wellbeing.
This type of insurance is classed a personal life policy but the great part is that there are no shady loopholes here, it’s simple mathematics and it has all been approved and rubber stamped by HMRC. The business will qualify for corporation tax relief on the monthly premiums and there is no additional income tax or national insurance to pay.
Day to day, we arrange Relevant Life plans for businesses of all shapes and sizes, from manufacturing firms employing 5 staff, to large charities with teams numbering 500+.
If there are two things that are certain in life, they’re death and taxes.
Make the most of the tax breaks offered by Relevant Life insurance and ensure your employee’s families are financially secure in the event of death. It’s probably a lot cheaper than you think.
With policies available from only £5 per month, there has never been a better time to get cover in place on either an individual or group basis. You won’t see Relevant Life widely advertised on your typical insurance comparison websites. At The Protection People we like to speak in plain English, making the complexities and nuances of business life insurance easier to understand.
You can call our team of consultants completely free of charge on 0808 281 9393. They will provide you with unbiased advice, completely tailored to you and your business. Get instant peace of mind at a price you really can afford.