Why a Relevant Life Policy?
Many clients I see already have personal life insurance that is being paid for personally from their own bank accounts. Since the introduction of relevant life policies these clients can often make significant savings by having their limited companies pay for their premiums instead. Normally when a limited company takes out a non registered non group life insurance for an employee or director the employee has P11D benefit in kind issues and they may as well have paid for the cover themselves. However the relevant life policy is set up under a special trust and gets around this issue by using pension legislation.
A large percentage of the clients that I have helped set up relevant life policies, have been IT contractors. Many of these contractors have been used to having death in service cover from their employers. When they start contracting they lose this important employee benefit. Many IT contractors work through their limited companies and thus taking advantage of a relevant life policy is an ideal solution to plug the gap that they have lost from the loss of their previous death in service that they had.
Larger Limited Companies
As well as helping smaller one man band limited companies relevant life policies are an ideal way of offering a valuable death in service benefit policy for employees. Many companies only want to offer death in service for a small number of staff such as 3 or 4. This small number of employees is too few for a group life scheme and in circumstances like this the employee can take out individual relevant life policies to offer death in service for those employees. I have done schemes like this for various companies. After getting basic information from the company owner such as date of births, names, sums assured and to what age cover is required, I provide the quotes to the business owner. After getting the go ahead I take over the whole application process and deal with each employee directly, this saves the company from getting involved in technical issues. When future employees join the company or old employees leave I sort the administration side of things out.