Within a business, you’ll know that you have key people who are the linchpin of your organisation, such as Company Directors, High Earners or Sales People and other key employees. It’s good to know that you can protect these assets with a Relevant Life Plan or Policy. Due to our experience and access to this market, at Teesside Money, we can help scour the market for you and find the best and most appropriate plan for your key staff.
Wondering what a Relevant Life Plan is?
A Relevant Life Plan is a tax efficient alternative to a ‘death in service’ benefit and it allows a business the opportunity to pay their key employees’ family a lump sum upon their death, if they die whilst employed by your business. Or, if they are diagnosed with a terminal illness. A plan such as this can help a business save almost 50% in tax compared to an ordinary life policy.
It’s especially useful for businesses which are too small to set up a group scheme, which can be costly. This way, you can provide perks for your staff, cost effectively.
For the Company Director, it can provide a valuable tax benefit. For the other key employees, it is possible to have individual levels of cover, so great if you just want to reward a handful of employees.
A Relevant Life Plan with Teesside Money, is an excellent incentive for your key employees – it will help you to retain and also attract the best employees to your business.
How does Relevant Life Insurance work?
You’ll have come across a Life Insurance policy right? This is pretty similar, as the individual’s premium will be assessed on things like salary, health, bills, mortgage costs and the like. The only difference being, the business pays the premium rather than the individual. Then, if the worst was to happen and the insured person dies whilst working for the company, the tax-free pay-out will be given to their beneficiaries, rather than the business.
What are the benefits of having a Relevant Life Plan?
The benefits are two-fold. Firstly, from the business’s perspective, it’s a great tax-efficient alternative to a group wide life assurance plan, especially if the business is on the smaller side. It allows the Directors of the business, for example, to take cover for themselves using their business rather than their own personal income. Also a great HR tool, as the business will attract better staff and more loyal ones in the process.
From the employee’s perspective, a Relevant Life Policy is a great perk, as they’re getting cover without having to pay the premiums themselves. It gives reassurance that the family is looked after the employee has passed.
Speak to us here at Teesside Money where our specialist will be happy to assist. We can talk through your options and compare providers for you, resulting in the best policy for you and your employees.