In an ever more competitive employment market, employers are looking closer at the overall benefits they offer, beyond just salary. This can be made up of several things including; healthcare cover, income protection and life insurance. These additional benefits can be a big factor when recruiting new staff and can also help with retaining existing employees. One of the most cost effective benefits for an employer to provide is often life insurance, specifically a Relevant Life Plan. A Relevant Life Plan is a term assurance plan available to employers, to provide an individual death in service benefit for an employee (including directors). It’s designed to pay a lump sum if the person covered dies or is diagnosed with a terminal illness, whilst they are employed during the term of the policy. A Relevant Life Plan is paid for by the employer. The key point is that there has to be an employment relationship for the plan to be available. Therefore the plan would not be available for partners in a partnership or sole traders. On death of the life insured the benefits are paid into a Trust, meaning the proceeds are paid free of Inheritance Tax. It is important that the Trust is set up correctly as there can be big consequences on both the premiums being paid in and more importantly when the benefits are paid out. For employers the premiums are usually allowable as a business expense meaning the business gets tax relief on the premiums paid. This makes the premiums very cost effective. Several providers also offer an additional valuable benefit. The life insured will have access to a network of medical practitioners who can answer any questions that they may have. So when faced with a medical problem, they’ll have all the information that they need to help them make the right decisions for their treatment and recovery. Lovewell Blake Financial Planning Limited can assist with all forms of group and business protection, including shareholder protection and loan cover. Should you wish to discuss this further please contact us.
