Relevant Life Insurance.

What is relevant life insurance?

Relevant Life Insurance is a cost-effective way for a company to provide life (and optionally critical-illness or terminal-illness) cover for an employee or director. The policy is taken out by the employer, with premiums paid by the business, not by the individual, making it an efficient alternative when a group scheme isn’t available. 

If the person covered dies or is diagnosed with a terminal illness (or, where offered, specified critical illness) during the policy term, a lump-sum is paid out to their family or other named beneficiaries via a trust.

Who is relevant life insurance for?

• Small or medium-sized companies that don’t qualify for a full group life scheme. 

• Businesses that wish to provide a “death-in-service”-style benefit to one or more individuals (e.g. directors, senior staff) without including all employees. 

• Company directors, salaried partners or employees whose remuneration (salary, dividends, bonuses) justifies a larger cover amount than a standard group scheme might offer. 

• Employers wanting to offer strong benefits to attract or retain talented staff, while gaining tax efficiencies. 

Not eligible: sole traders, or business owners/partners who are not classed as employees, and in general members of partnerships or LLPs (unless they are salaried employees) — these are less likely to qualify under many providers’ terms.