Relevant life cover is an alternative if you would prefer not to create a group scheme, but you would like to provide your own death in service benefits.
Relevant life cover is a tax efficient way for employers to provide individual death-in-service benefits to employees.
It pays out a lump sum if the employee dies or is diagnosed with a terminal illness during the term of the policy. It’s paid for by the business and placed into trust. This means the lump sum is paid out quickly to the employee’s beneficiaries and is free from inheritance tax.
Who is it for?
- SMEs that don’t have enough staff to warrant a group scheme.
- Members of a group scheme that would like to top up their benefits.
- Directors who would prefer not to create a group scheme but would like to provide their own individual ‘death in service’ benefits.
- Anyone classed as a high earning individual i.e. directors, where ‘death in service’ is not currently included in their lifetime allowance.
- It’s a tax efficient alternative to group life insurance.
- It’s a good way to attract and retain quality staff.
- It gives employees life insurance without them having to pay premiums.
- It can be treated as an expense, which could lower your business’s tax bill.