information

LV= uses cookies to give you the best experience online and to provide anonymised, aggregated site usage data. You can find out what cookies we use and how you can disable them in our Cookie Policy. By continuing to use our website, you agree to our use of cookies in accordance with our cookie policy unless you have disabled them.

skip to main content

Business Protection Relevant Life Cover product profile

Read below a summary of the relevant product information about Relevant Life Cover, in accordance with the Insurance Distribution Directive. Designed to help you make an informed decision and comparison for your client, we set out the product’s target market, distribution strategy, suitability, main features, risks, options and costs.

This information is also available in downloadable pdf format.

This is only a summary of the product features. For more information please read the Key Features document and Policy Conditions.

Relevant Life Cover is a tax-efficient life insurance policy, allowing a company to offer a death-in-service benefit to its employees (including salaried directors). It's set up by the company and pays out a tax-free, lump sum on the death (or diagnosis of a terminal illness) of the person insured. Because the policy is written into a discretionary trust the proceeds go directly to the employee's family or financial dependants.

Relevant Life Cover might be suitable for businesses that are too small for a group life scheme, have high earning employees who might exceed their personal pension lifetime allowance or have members of group schemes who want to top up their benefits.

Relevant Life Cover is not suitable if someone is a non-salaried director of a Limited Company, an Equity Member of an LLP or a sole trader, however this policy can normally be set up for a PAYE employee regardless of their legal trading status of the employer.

To ensure your clients receive the right level of protection, we believe this product should be sold on an advised basis, face to face or over the phone.

It’s important to regularly review your clients’ circumstances and protection needs to make sure their cover is appropriate.

  • Pays a cash lump sum on death during the term
  • Terminal Illness cover is included at no extra cost
  • Level or inflation-linked cover
  • Guaranteed premiums
  • We won't pay a claim if the insured dies as a result of intentionally taking their own life in the first 12 months of the policy
  • We won't pay a terminal illness claim in the last 12 months of the policy
  • This policy is not suitable for clients who want to cover their employees against a critical illness or protect their income should they be unable to work due to accident and sickness
  • After the plan has been issued, your clients won't be able to change it
  • There is no cash in value at any time
  • If your client stops paying their premiums, their cover may cease
  • If your clients choose level cover, it won't keep up with inflation and could buy less in the future
  • If the Government changes the tax treatment of protection products like Relevant Life Cover, the amount of cover paid out on a claim , taxation of premiums or claim payments, or the premium you pay for cover could change
  • There is no minimum amount of cover; the maximum amount is £10 million
  • The minimum term is 5 years and maximum term 45 years. The policy must end before the person insured reaches the age of 75 (for level cover) or age 70 (for inflation-linked cover)
  • Clients take out a policy on a single life, life of another basis for their employees or directors (if salaried)
  • The policy will only pay out once, on the first death (or diagnosis of a terminal illness) and will then end
  • The policy must be written into a Discretionary Trust at the start of the policy with the employee’s family or dependents as beneficiaries. The beneficiaries must either be individuals or a charity, so it can’t be assigned to a mortgage lender for example. If the policy is not written into a trust, and the beneficiaries are not individuals it won’t fulfil the legislative requirements for a Relevant Life policy, which could have tax implications.
  • The premiums are paid for by the employer and unlike group schemes, usually treated by HM Revenue & Customs as a business expense

To apply clients must be:

  • A business registered in the UK
  • Permanently living in the UK

And the person insured/employee must be:

  • Aged between 17 and 69 (for level cover)
  • Aged between 17 and 59 (for inflation-linked cover)
  • Clients can only set this policy up on a life of another basis and the policy must be put into a Discretionary Trust with the employee’s family or dependents as beneficiaries

Is suitable for:

  • Providing a lump sum payment in the event of death, or terminal illness
  • Employers (Limited Companies and Limited Liability Partnerships) who wish to provide lump sum death in service benefits for their key employees
  • Employers who wish to provide additional life cover for their high earning employees who already have employer life cover under a group scheme and the cover exceeds the life time allowance
  • Employees need for cover expires before they reach age 75 for level cover and age 70 for inflation-linked cover as these are the maximum ages at which the policy can end
  • Employers who wish to provide additional life cover for their high earning employees who already have employer life cover under a group scheme and the cover exceeds the life time allowance
  • Clients who want guaranteed premiums

Is not suitable for:

  • Personal protection (this policy only provides death in service cover and must be taken out by an employer)
  • Covering a mortgage (as the policy cannot be assigned to a lender)
  • Those looking to provide a lump sum if the person insured is diagnosed with a critical illnesses
  • Those looking for business protection to cover the loss of a key person, to provide finances to purchase shares of director or partner in the event of their death, or to cover an interest only business loan
  • Businesses not registered in the UK
  • Employees who don’t have any financial dependants. We believe this product is unlikely to be suitable
  • Non-salaried directors of limited companies (those who aren’t taxed under PAYE) and equity members of an LLP
  • Sole traders or partnerships as they are considered to be self-employed

Guaranteed Increase Options: Your client can increase the amount of the cover, if certain events happen and they are eligible. If your client changes the amount of their cover using one of these options, their premium will also change to reflect this. The premium will be based on the age and smoker status of the person insured at the time of change. For more details, refer to the Policy Terms and Conditions.

If the person insured (employee) leaves the company: There are a number of options including stopping the plan and ending the trust, or issuing a new policy, on the same terms as the existing contract, to the individual or to their new employer. For more details, refer to the Policy Terms and Conditions.

Member benefits: With this policy the insured person automatically becomes a member and is entitled to a range of benefits, at no added cost. These include voting rights, free advice helplines and discounts on selected LV= products. These benefits are non-contractual and can be changed or removed at any time, and conditions apply. More details about LV= membership and member benefits are available at LV.com/members.

LV= Business Care: For all new policies (from 1 October 2015), we offer the policyholder (the business) telephone access to free specialist advice in business and commercial law, business tax and VAT. Provided at no added cost, these services are non-contractual and can be changed or removed at any time, and conditions apply. More details about LV= Business Care are available at LV.com.

LV= Doctor Services: For all new policies (from 1 September 2018), the person insured under the policy has access to a number of medical services and advice which can be accessed via one simple app or phone call, at no added cost. These include Remote GP, Second Opinion, Prescription Services, Remote Physiotherapy, Remote Psychological Services and discounted health MOTs. These benefits are non-contractual and can be changed or removed at any time, and conditions apply. For more details visit LV.com

The policy premium also includes a fee, which is as fixed monthly amount, to cover administration and support costs.

LV= Doctor Services, LV= Business Care and Rehab Support Services are provided by third party companies. These services are not regulated by the Financial Conduct Authority or the Prudential Regulation Authority.


Options list icon

Business Protection options

Find out more about the type of businesses we cover and the policies available.

More on Business Protection options

Calculator icon

Tools and calculators

See all our business protection calculators available to simplify your client conversations.

View all tools and calculators

Team icon

Business Protection support

Our team will make sure that all your Business Protection applications are dealt with quickly and efficiently.

More on Business Protection support

Telephone handset icon

Why choose LV=

Your clients can access a range of resources and expert advice, as well as a number of value added services.

More on why to choose LV=

FOR UK FINANCIAL ADVISERS ONLY
LV=, County Gates, Bournemouth, BH1 2NF, UK