Put Life Over Expenses
Relevant Life Plan is a cost-efficient way of offering life cover to you or your employees. It’s tax efficient and, typically premiums can be treated as an allowable business expense by HMRC. With Corporation tax relief available, no additional income tax or National Insurance to pay, it’s good business for both you and your employees.
Added Peace of Mind Tax Free.
Our Relevant Life Insurance London provides further benefits, with the main one being its tax effectiveness. The insurance policy is personalized for both you and your workers, making it a business expenditure that is tax-deductible. It doesn't affect annual or lifetime pension totals, and if your company doesn't qualify for a group life scheme, the Relevant Life Insurance London serves as an affordable solution for providing life insurance to employees
What Is The Relevant Life Plan
- The program is aimed at offering life insurance protection to a worker during their time with you, possibly including its directors.
- Your company contributes consistent payments determined by the extent of the policy.
- Should a covered individual pass away or be diagnosed with an incurable disease (expected to have a life expectancy of less than a year) while working under the policy, the plan will provide a guaranteed, single payment.
- The plan is crafted to adhere to specific legal standards, ensuring that your contributions, advantages, and choices are handled in a tax-efficient manner.
Mechanism of Operation
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What happens when you or an employee departs from the organization?
You must choose from two choices that need to be made within 90 days of resignation:
- Your new employer can request to maintain the policy with Terminal Illness Protection.
- The exiting employee can continue with the policy excluding Terminal Illness Protection.
There's no requirement for additional health records or a reevaluation by the insurer.
Why is this policy beneficial?
- Provides an affordable method to offer life insurance with benefits for Terminal Illness to your staff.
- Allows for significant reductions in the cost of life insurance compared to self-purchasing.
- Typically considered a business cost, which means it may be deductible for Corporate Tax.
- If the plan is held in trust, it can help with estate planning for Inheritance Tax if the estate is or could exceed the existing thresholds.
Additional Benefits
The strategy automatically adds some extra advantages, without requiring additional payment:
- Throughout the application process, the employee receives protection from Accidental Death Benefits. In the event of the employee's passing in a car accident, for instance, we'll cover the insured amount, not exceeding £300,000. The employee is insured for up to 90 days from the time we either accept, delay, or reject the application.
- Additionally, the employer has the ability to raise the policy limit without the need for another underwriting process by utilizing the‘Changing your policy’ As the employer, you are responsible for the increased premiums to boost the coverage and make policy adjustments. This feature to modify the policy is granted under specific conditions if the employee:
- Reaches a raise in salary.
- Takes on a larger mortgage.
- Marries or is involved in a legally recognized civil partnership.
- Adopts a child, either biologically or through legal adoption.
What Could You Save?
The distinctive feature of Relevant Life Insurance London allows you to utilize the tax system to your advantage, making it possible to secure your personal insurance with the assistance of the government.
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Optimism Amidst Adversity
Discovering that a Relevant Life Plan could act as a safeguard for your family's financial stability in the event of your untimely passing is comforting.
Also Read: Financial coverage for your Family
Outcome Of a Payout
Take, for instance, Ali McAllister. He is the head of an IT firm, leading a healthy life through regular physical activity. However, he harbors concerns about his ability to continue supporting his wife, Bella. The firm secures a Relevant Life Plan for him, with his coverage amounting to £1 million. He names Bella as his designated beneficiary under the trust.
Should the worst occur and Ali were to pass away while the plan was active, the trustees of the Relevant Life Plan would receive £1 million. This amount could then be distributed to Bella, tax-free. This generous sum could ensure Bella has the financial means to lead a comfortable life for several years ahead.
The Importance Of Trusts
Creating a policy in trust is an effective method for ensuring that the advantages of the policy reach the intended recipients promptly, without any avoidable hold-ups. Trusts offer several advantages, including:
- Beneficiaries can get their money at the appropriate moment with tax efficiency
- Probate procedures are circumvented
- Avoidance of probate law applies
- Tax liability from Inheritance Tax can be either minimized or avoided
Cover Where It’s Due
Individuals with significant pension funds from registered group schemes may end up paying additional taxes on their estates. However, this isn't the case with a Relevant Life Plan, as the benefits from such plans are exempt under the current regulations from affecting the annual or lifetime pension limits.
Illustrating The Impact Of The Lifetime Allowance
Let's take the case of Dave Randall, who is 45 and serves as the chief doctor at a GP Medical center, earning a yearly salary of £100,000. Dave has been consistently making substantial contributions to his pension, resulting in a retirement savings of £500,000, which is enough, through the sale of his current residence, to construct his dream home and lead a comfortable life after retirement.
This year, Dave's employer has chosen to provide a Death In Service benefit equal to 10 times the employees' salary, with the objective of retaining the most dedicated and skilled staff members.
Should his employer choose a group life plan, a registered pension scheme, Dave and his family could face financial disadvantages, as any benefit from such a plan could exceed the lifetime allowance, leading to the taxed excess of 55%. However, the company director, who is proactive in her research, decides against this approach with the guidance of a financial advisor and selects our Relevant Life Insurance London instead.
Find Out More
Folwealth, an authorized and regulated company by the Financial Conduct Authority, offers Wealth Relevant Life Insurance London to our clients. Our professionals are here to guide you towards the most suitable solutions.
Reach out to us today to schedule a complimentary first meeting to talk about your requirements privately.
