Relevant Life Plan
What is 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. It’s designed to pay a lump sum if the person covered dies or is diagnosed with a terminal illness, whilst employed during the term. A Relevant Life Plan is paid for by the employer.
Who is it aimed at?
- Employers looking to provide ‘death in service’ benefits, but with too few employees to set up a group scheme
- Directors wishing to provide their own individual ‘death in service’ benefits without taking out a scheme on all employees.
- High earning individuals, such as directors, where ‘death in service’ does not form part of their ‘lifetime allowance’ (£1,055,000 for the 2019/20 tax year).
Relevant Life Plans are not available where there is no employer/employee relationship. For example, sole traders, equity partners of a partnership or equity members of a Limited Liability Partnership.
Why consider a Relevant Life Plan?
Relevant Life Plans are similar to most other types of life cover except they aim to provide a tax efficient benefit provided by an employer for an employee.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax reliefs depends on individual circumstances.