If you’re considering death in service life insurance for your employees then Relevant Life cover could provide a smarter tax efficient and flexible solution for the business and your staff.
Relevant Life cover is a type of life insurance that allows companies to offer death-in-service benefits to employees and directors the company pays a salary to. Its set up and paid for by the company and then placed in trust for the employees chosen beneficiaries.
If the employee dies during the policy term, the insurance pays out a tax free, lump sum amount of money via the trust to those chosen people.
Benefits of Relevant Life cover include:
Premiums are usually treated by HMRC as a tax deductible business expense. This means they can usually be offset against the company’s corporation tax making it a tax efficient way to offer staff life insurance, and the premiums don’t form part of the employees remuneration or benefits package. So they don’t have to pay income tax from National Insurance contributions on the premiums.
Because the policy is placed in trust any money paid out shouldn’t form part of the employee’s estate for inheritance tax purposes. Also because the money is paid via a trust it can be paid very quickly, helping ensure your employees families and loved ones are looked after when they need it most.
For more information on this type if death-in-service life insurance for your employees, please speak to your financial adviser.