What is a relevant life plan insurance and can the company pay for it?
A relevant life plan is a type of life insurance policy that is designed specifically for UK businesses. It is intended to provide death-in-service benefits for key employees of a company, typically those who are considered essential to the company’s operations; therefore it is considered a business expense.
- Death-in-service benefit: A relevant life plan pays out a tax-free lump sum to the employee’s beneficiaries in the event of their death while employed by the company. This can help provide financial security for the employee’s family and help the company to replace the key employee.
- Tax efficient: Relevant life plans are tax efficient for businesses as the premiums are not considered a benefit-in-kind for the employee, and the company can also claim the premiums as a business expense.
- Flexibility: Relevant life plans can be tailored to meet the specific needs of the company and the employee, with options such as level or decreasing cover, and the ability to add critical illness cover.
- Cost-effective: Relevant life plans can be a cost-effective way for a business to provide death-in-service benefits for key employees, especially for small to medium-sized businesses.
It’s important to note that a relevant life plan is not a substitute for a group life insurance policy, which is designed to provide death-in-service benefits for all employees of a company. Also, it’s important to consult with a financial professional to understand how a relevant life plan may affect your business and to determine if it is the best option for your company.
In conclusion, having your company pay for a relevant life plan insurance policy for the director can provide a number of significant benefits. Firstly, it allows the director to have a life insurance policy in place without having to pay for it out of their own pocket. Additionally, the policy can provide financial security for the director’s family in the event of the director’s death. Furthermore, a relevant life plan insurance policy can also provide tax benefits for the company, as the premiums are considered a business expense. Overall, a relevant life plan insurance policy can be a valuable benefit for both the director and the company.
If you would like to speak to someone about a Relevant Life Plan or for more information please fill out an enquiry form.