Relevant Life Cover:
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Relevant Life Cover
Relevant Life Cover allows employers to offer a death-in-service benefit to employees. It’s a tax-efficient life insurance policy – paying out a tax-free lump sum on death or diagnosis of a terminal illness.
Main features of Relevant Life cover
Knowing your client is protecting the interests of their most important business asset – their people - will help set your their mind at ease.The death-in-service benefit pays out to the employee’s family or dependants who rely on them financially. Our cover offers many other features, including:
- Benefits are usually free from inheritance tax.
- Designed for small and medium-sized businesses (SMEs).
- Counts as a tax-deductible business expense (unlike some group schemes).
Relevant Life Cover Product Profile
With details on suitability, target market, trust information and support – you’ll get the information you’ll need to recommend Relevant Life Cover to your clients.Important information
Here are some important things you should know about Relevant Life Cover:- Relevant Life Cover must be written into a discretionary trust.
- We won’t pay a claim if the person covered dies as a result of intentionally taking their own life within the first 12 months of the policy starting.
- The person covered must be a UK resident and an employee of the UK business.
- Non-salaried directors of a Limited Company, Sole traders, and partners in Partnerships or Limited Liability Partnerships are not eligible to take out relevant life cover for themselves. However, they can put in place for any employees.
Cover Options
Level or Inflation-Linked cover
Your client can choose from two cover options – level, or inflation-linked.
- With level cover, the amount of cover remains the same, from the start until the end of the policy.
- With inflation-linked cover, the cover increases each year in-line with inflation; the premium increases by inflation x1.5.
Guaranteed increase options
Your client can increase cover for their employees - without the need for additional underwriting. This applies within certain limits:- If their mortgage increases as a result of moving or home improvements.
- If they get married or enter a civil partnership.
- If they have or legally adopt a child.
- If they get divorced.
- If their salary increases.
Level or Inflation-Linked cover
Your client can choose from two cover options – level, or inflation-linked.
- With level cover, the amount of cover remains the same, from the start until the end of the policy.
- With inflation-linked cover, the cover increases each year in-line with inflation; the premium increases by inflation x1.5.
Setting up cover
Relevant Life Cover is arranged on an individual and life-of-another basis. The employer is the policy holder, and the employee is the person insured. Many employers choose to set the amount of cover as a multiple of their employee's salary. We suggest a maximum amount of cover based on the employee's age and gross annual earnings, subject to the following maximum limits:
- 17-29 years old Up to 35x remuneration
- 30-39 years old Up to 30x remuneration
- 40-49 years old Up to 25x remuneration
- 50-59 years old Up to 20x remuneration
- 60+ Up to 15x remuneration
If the amount of cover your client chooses isn’t within the limits set out above, please let us know.
If your client wants cover of more than £3.5m for their employee, we’ll require evidence of earnings.
The company insures the employee/s and polices are written into a discretionary trust. Find out more about discretionary trust.
Free support for Business Protection clients
We’ve designed a 24/7 support network just for your clients. It offers legal, tax and VAT-advice, for free.
Business legal advice
Your client gets direct access to legal experts who specialise in commercial law.
They cover areas including:
They cover areas including:
- Employment law and tribunal claims.
- Health and safety law and requirements.
- Disputes, including tenancy and debt recovery.
- Commercial and contractual disputes.
Learn more about our Business Care line.
Business tax and VAT advice
Your client can speak to business tax and VAT experts, whenever they need to.
A team of experts, from accountants to ex-HMRC employees, are on hand to advise on areas including:
A team of experts, from accountants to ex-HMRC employees, are on hand to advise on areas including:
- Tax and VAT relief.
- Completing a self-assessment return.
- Current and changes to tax rules.
- Dividends paid from limited companies.
- Receiving a tax investigation notice.
LV= Doctor Services
Your clients and their spouse/partner* get more than Business Protection. We offer Doctor Services, at no extra cost. This is particularly useful to businesses who want to support the health and wellbeing of their employees.
They can access six medical services by phone or app:
- Remote GP 24/7 – Unlimited consultations with a UK doctor available by phone or video.
- Prescription services – Get a private prescription without the need for your client to visit their local GP.
- Remote physiotherapy – Up to five free sessions** with a trained UK physiotherapist and receive a bespoke treatment plan through video consultations.
- Second opinion – Check a diagnosis and get advice on treatment options with a UK medical specialist by video or face to face consultation.
- Remote psychological services – Up to five free sessions** of mental health support including counselling and Cognitive Behavioural Therapy from a network of highly trained therapists.
- Discounted health MOTs – Benefit from 25% off health MOTs - a service that provides an assessment of overall health, identifying any risk and areas of improvement.
*Spouse, civil partner or person with whom the policyholder lives with as a partner and at the same address.
**The five sessions limit is split between the policyholder/life assured and partner/spouse.
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